SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-21461)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. ____ [ ]
Post-Effective Amendment No. 40 [x]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. ____ [ ]
Fidelity Magellan Fund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices) (Zip Code)
(617) 570-7000
(Registrant's Telephone Number)
Arthur S. Loring
82 Devonshire Street,
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) Immediately upon filing pursuant to paragraph (b) of Rule 485
( X ) On May 20, 1994 pursuant to paragraph (b) of Rule 485
( ) 60 days after filing pursuant to paragraph (a) of Rule 485
( ) On ( ) pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule before May 31, 1994.
FIDELITY MAGELLAN FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Fund at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
Performance
c,d.................................
.
4a Charter
i.................................
The Fund at a Glance; Investment Principles and
ii............................... Risks
b................................... Investment Principles and Risks
..
Who May Want to Invest; Investment Principles and
c.................................... Risks
5a.................................. Charter
..
b(i)................................ Cover Page, The Fund at a Glance, Charter, Doing
Business with Fidelity
Charter
(ii)..............................
(iii)........................... Expenses; Breakdown of Expenses
c, Charter; Breakdown of Expenses
d................................
Cover Page; Charter
e....................................
Expenses
f....................................
g(i)................................ Charter
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii...............................
*
b...................................
.
Transaction Details; Exchange Restrictions
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
Expenses; How to Buy Shares; Transaction Details
b...................................
.
Sales Charge Reductions and Waivers
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f ................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY MAGELLAN FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. *
..
13a - Investment Policies and Limitations
c............................
*
d..................................
14a - Trustees and Officers
c............................
15a, *
b..............................
Trustees and Officers
c..................................
16a FMR
i................................
Trustees and Officers
ii..............................
Management Contract
iii.............................
Management Contract
b.................................
c, Contracts with Companies Affiliated with FMR
d.............................
e - *
g...........................
Description of the Fund
h.................................
Contracts with Companies Affiliated with FMR
i.................................
17a - Portfolio Transactions
c............................
*
d,e..............................
18a................................ Description of the Fund
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with Companies Affiliated with FMR
b..............................
*
c.................................
22.................................. Performance
..
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
FIDELITY
MAGELLAN
(Registered trademark)
FUND
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
A Statement of Additional Information dated May 20, 1994 has been filed
with the Securities and Exchange Commission, and is incorporated herein by
reference
(is legally considered a part of this prospectus). The Statement of
Additional Information is available free upon request by calling Fidelity
at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depositary institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including possible loss of principal.
Magellan is a growth fund. It seeks to increase the value of your
investment over the long term by investing in securities with growth
potential.
PROSPECTUS
MAY 20, 1994
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
MAG-pro-594
(Registered trademark)
82 Devonshire Street, Boston, MA 02109
CONTENTS
KEY FACTS THE FUND AT A GLANCE
WHO MAY WANT TO INVEST
5 EXPENSES The fund's sales
charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of the fund's financial data.
PERFORMANCE How the fund has
done over time.
THE FUND IN DETAIL CHARTER How the fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
The fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND
ACCOUNT POLICIES TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND
WAIVERS
KEY FACTS
THE FUND AT A GLANCE
GOAL: capital appreciation (increase in the value of the fund's shares). As
with any mutual fund, there is no assurance that the fund will achieve its
goal.
STRATEGY: Invests mainly in common stock and securities convertible into
common stock of domestic, foreign and multinational issuers of all sizes
that offer potential for growth.
MANAGEMENT: Fidelity Management & Research Company (FMR) chooses
investments for the fund. FMR is the management arm of Fidelity
Investments, which was established in 1946 and is now America's largest
mutual fund manager. Foreign affiliates of FMR help choose investments for
the fund.
SIZE: As of March 31, 1994, the fund had over $33 billion in assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns. The
fund invests for growth; it does not invest for income, and is not in
itself a balanced investment plan.
Over time, stocks have shown greater growth potential than other types of
securities. In the short er term, however, stock prices can fluctuate
dramatically in response to company, market, or economic news. When you
sell your fund shares, they may be worth more or less than what you paid
for them.
THE SPECTRUM OF
FIDELITY FUNDS
(checkmark)
Broad categories of Fidelity funds are presented here in order of ascending
risk. Generally, investors seeking to maximize return must assume greater
risk. Magellan is in the GROWTH category.
(bullet) MONEY MARKET Seeks income and stability by investing in
high-quality, short- term investments.
(bullet) INCOME Seeks income from investments in bonds.
(bullet) GROWTH AND INCOME Seeks long-term growth and income by investing
in stocks and bonds.
(arrow) GROWTH Seeks long-term growth by investing mainly in stocks.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund. See pages 1 8 and 24-30 for an explanation
of how and when these charges apply. Lower sales charges may be available
for accounts over $250,000.
Maximum sales charge on purchases
(as a % of offering price) 3.00%
Maximum sales charge on
reinvested d istributions None
Deferred sales charge on redemptions None
Exchange fee None
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund
pays a management fee that varies based on its performance. It also incurs
other expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports. The fund's
expenses are factored into its share price or dividends and are not charged
directly to shareholder accounts (see page 14).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets. A portion of the
brokerage commissions that the fund paid was used to reduce fund expenses.
Without this reduction, the total fund operating expenses would have been
1.00%.
Management fee .76%
12b-1 fee None
Other expenses .23%
Total fund operating expenses .99%
EXAMPLE: Let's say, hypothetically, that the fund's annual return is 5% and
that its operating expenses are exactly as just described. For every $1,000
you invested, here's how much you would pay in total expenses if you close
your account after the number of years indicated:
After 1 year $40
After 3 years $61
After 5 years $83
After 10 years $148
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
UNDERSTANDING
EXPENSES
(checkmark)
Operating a mutual fund involves a variety of expenses for portfolio
management, shareholder statements, tax reporting, and other services. As
an investor, you pay some of these costs directly (for example, the fund's
3% sales charge). Others are paid from the fund's assets; the effect of
these other expenses is already factored into any quoted share price or
return.
FINANCIAL HIGHLIGHTS
The table that follows is included in the fund's Annual Report and
has been audited by Coopers & Lybrand, independent accountants.
Their report on the financial statements and financial highlights is
included in the Annual Report. The financial statements and financial
highlights are incorporated by reference into ( are legally a
part of) the fund's Statement of Additional Information.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Selected
Per-Share Data
Years ended 1985 1986 1987 1988 1989 1990 1991
1992 1993 1994
March 31
Net asset $ 35.2 $ 37.6 $ 55.3 $ 59.8 $ 44.1 $ 52.9 $ 58.6
$ 64.8 $ 68.1 $ 68.4
value, 1 9 4 5 0 2 0 4
3 4
beginning of
period
Income from
Investment
Operations
Net investment .79 .49 .42 .63 1.09 1.35 1.39 .81
1.20 . 61
income
Net realized 5.75 19.59 11.39 (6.64) 8.63 9.39 8.10 9.21
9.18 7.92
and
unrealized gain
(loss)
on investments
Total from 6.54 20.08 11.81 (6.01) 9.72 10.74 9.49 10.02
10.38 8.53
investment
operations
Less
Distributions
From net (.37) (.65) (.46) (.72) (.90) (1.24) (.83) (1.30)
(1.25) (.75)
investment
income
From net (3.69) (1.78) (6.84) (9.02) -- (3.82) (2.42) (5.43)
(8.82) (6.50)
realized gain
Total (4.06) (2.43) (7.30) (9.74) (.90) (5.06) (3.25) (6.73)
(10.07 (7.25)
distributions
Net asset $ 37.6 $ 55.3 $ 59.8 $ 44.1 $ 52.9 $ 58.6 $ 64.8 $ 68.1
$ 68.4 $ 69.7
value, end of 9 4 5 0 2 0 4 3 4
2
period
Total return AB 21.01 56.59 24.26 (9.64) 22.26 20.32 17.26 16.48
17.06 12.94
% % % % % % % % %
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end $ 2,36 $ 6,08 $ 9,89 $ 8,440 $ 9,62 $ 13,1 $ 14,8 $ 19,8 $ 24,8
$ 33,11
of period (In 4 6 0 7 62 08 24 86
9
millions)
Ratio of 1.12% 1.08% 1.08% 1.14% 1.08% 1.03% 1.06% 1.05% 1.00%
.99%C
expenses to
average net
assets
Ratio of 1.12% 1.08% 1.08% 1.14% 1.08% 1.03% 1.06% 1.05% 1.00%
1.00%
expenses to
C
average net
assets before
expense
reductions
Ratio of net 2.79% 1.95% 1.18% 1.33% 2.13% 2.54% 2.47% 1.57% 2.11%
1.07%
investment
income to
average net
assets
Portfolio 126% 96% 96% 101% 87% 82% 135% 172% 155%
132 %
turnover rate
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A
PORTION OF THE FUND'S EXPENSES.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
The fund's fiscal year runs from April 1 through March 31. The tables below
show the fund's performance over past fiscal years compared to two
measures: investing in a broad selection of stocks (S&P 500), and not
investing at all (inflation, or CPI). To help you compare this fund to
other funds, the chart on page 8 displays calendar-year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
March 31, 1994 year years years
Magellan 12.94% 16.79% 18.91%
Magellan (load adj .A ) 9.55% 16.08% 1 8.55 %
S&P 500(Registered trademark) 1.47% 12.1 3 % 14.77%
Consumer Price Index 2.51 % 3.78 % 3.68 %
CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
March 31, 1994 year years years
Magellan 12.94% 117.25% 465.13%
Magellan (load adj .A ) 9.55% 110.73% 448.17%
S&P 500(Registered trademark) 1.47% 77.2 3 % 296. 63 %
Consumer Price Index 2.51 % 20.36 % 43.47 %
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING THE FUND'S 3% SALES
CHARGE.
EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the
fund on March 31, 1984. From that date through March 31, 1994, the fund's
total return, including the effect of paying the 3% sales charge, was
448.17%. That $10,000 would have grown to $54,817 (the initial investment
plus 448.17% of $10,000).
$10,000 OVER TEN YEARS
Fiscal years 198 4 19 89 199 4
Row: 1, Col: 1, Value: 9700.0
Row: 2, Col: 1, Value: 9622.869999999999
Row: 3, Col: 1, Value: 8966.440000000001
Row: 4, Col: 1, Value: 9256.09
Row: 5, Col: 1, Value: 9109.710000000001
Row: 6, Col: 1, Value: 10171.73
Row: 7, Col: 1, Value: 10190.41
Row: 8, Col: 1, Value: 10321.22
Row: 9, Col: 1, Value: 10196.64
Row: 10, Col: 1, Value: 10492.51
Row: 11, Col: 1, Value: 11554.54
Row: 12, Col: 1, Value: 11635.51
Row: 13, Col: 1, Value: 11738.29
Row: 14, Col: 1, Value: 11800.58
Row: 15, Col: 1, Value: 12438.57
Row: 16, Col: 1, Value: 12810.56
Row: 17, Col: 1, Value: 12906.88
Row: 18, Col: 1, Value: 12969.99
Row: 19, Col: 1, Value: 12362.18
Row: 20, Col: 1, Value: 13162.63
Row: 21, Col: 1, Value: 14275.29
Row: 22, Col: 1, Value: 15015.96
Row: 23, Col: 1, Value: 15607.16
Row: 24, Col: 1, Value: 17221.36
Row: 25, Col: 1, Value: 18380.52
Row: 26, Col: 1, Value: 18463.55
Row: 27, Col: 1, Value: 19070.36
Row: 28, Col: 1, Value: 19524.93
Row: 29, Col: 1, Value: 18222.54
Row: 30, Col: 1, Value: 19395.05
Row: 31, Col: 1, Value: 17746.33
Row: 32, Col: 1, Value: 18673.51
Row: 33, Col: 1, Value: 18861.11
Row: 34, Col: 1, Value: 18581.42
Row: 35, Col: 1, Value: 20997.12
Row: 36, Col: 1, Value: 22554.16
Row: 37, Col: 1, Value: 22840.38
Row: 38, Col: 1, Value: 22474.01
Row: 39, Col: 1, Value: 22496.93
Row: 40, Col: 1, Value: 23428.25
Row: 41, Col: 1, Value: 24573.18
Row: 42, Col: 1, Value: 25560.03
Row: 43, Col: 1, Value: 24932.03
Row: 44, Col: 1, Value: 18498.24
Row: 45, Col: 1, Value: 17101.26
Row: 46, Col: 1, Value: 18767.32
Row: 47, Col: 1, Value: 19511.46
Row: 48, Col: 1, Value: 20695.53
Row: 49, Col: 1, Value: 20639.37
Row: 50, Col: 1, Value: 21009.1
Row: 51, Col: 1, Value: 20952.94
Row: 52, Col: 1, Value: 22385.06
Row: 53, Col: 1, Value: 22239.98
Row: 54, Col: 1, Value: 21533.28
Row: 55, Col: 1, Value: 22436.54
Row: 56, Col: 1, Value: 22904.56
Row: 57, Col: 1, Value: 22595.67
Row: 58, Col: 1, Value: 23039.65
Row: 59, Col: 1, Value: 24908.76
Row: 60, Col: 1, Value: 24503.47
Row: 61, Col: 1, Value: 25233.0
Row: 62, Col: 1, Value: 26501.32
Row: 63, Col: 1, Value: 27900.53
Row: 64, Col: 1, Value: 27658.46
Row: 65, Col: 1, Value: 29982.29
Row: 66, Col: 1, Value: 30766.59
Row: 67, Col: 1, Value: 31299.13
Row: 68, Col: 1, Value: 30316.35
Row: 69, Col: 1, Value: 30815.0
Row: 70, Col: 1, Value: 31007.81
Row: 71, Col: 1, Value: 29007.97
Row: 72, Col: 1, Value: 29603.78
Row: 73, Col: 1, Value: 30360.19
Row: 74, Col: 1, Value: 29593.42
Row: 75, Col: 1, Value: 32225.51
Row: 76, Col: 1, Value: 32365.58
Row: 77, Col: 1, Value: 31999.26
Row: 78, Col: 1, Value: 28863.97
Row: 79, Col: 1, Value: 27032.37
Row: 80, Col: 1, Value: 26698.37
Row: 81, Col: 1, Value: 28718.52
Row: 82, Col: 1, Value: 29609.73
Row: 83, Col: 1, Value: 31679.61
Row: 84, Col: 1, Value: 34430.3
Row: 85, Col: 1, Value: 35599.75
Row: 86, Col: 1, Value: 35731.52
Row: 87, Col: 1, Value: 37768.93
Row: 88, Col: 1, Value: 35549.56
Row: 89, Col: 1, Value: 37757.61
Row: 90, Col: 1, Value: 38918.25
Row: 91, Col: 1, Value: 38771.05
Row: 92, Col: 1, Value: 39291.92
Row: 93, Col: 1, Value: 37349.97
Row: 94, Col: 1, Value: 41758.17
Row: 95, Col: 1, Value: 41776.43
Row: 96, Col: 1, Value: 42622.43
Row: 97, Col: 1, Value: 41466.03
Row: 98, Col: 1, Value: 42080.75
Row: 99, Col: 1, Value: 42483.94
Row: 100, Col: 1, Value: 41735.64
Row: 101, Col: 1, Value: 42906.89
Row: 102, Col: 1, Value: 41976.4
Row: 103, Col: 1, Value: 42457.91
Row: 104, Col: 1, Value: 42757.23
Row: 105, Col: 1, Value: 43837.39
Row: 106, Col: 1, Value: 44687.32
Row: 107, Col: 1, Value: 45864.61
Row: 108, Col: 1, Value: 46822.04
Row: 109, Col: 1, Value: 48538.33
Row: 110, Col: 1, Value: 49013.5
Row: 111, Col: 1, Value: 50945.32
Row: 112, Col: 1, Value: 51655.77
Row: 113, Col: 1, Value: 52225.61
Row: 114, Col: 1, Value: 55296.83
Row: 115, Col: 1, Value: 55896.28
Row: 116, Col: 1, Value: 55933.28
Row: 117, Col: 1, Value: 54090.55
Row: 118, Col: 1, Value: 55706.1
Row: 119, Col: 1, Value: 57907.61
Row: 120, Col: 1, Value: 57483.03
Row: 121, Col: 1, Value: 54817.23
$
$54,817
UNDERSTANDING
PERFORMANCE
(checkmark)
Because this fund invests in stocks, its performance is related to that of
the overall stock market. Historically, stock market performance has been
characterized by volatility in the short run and growth in the long run.
You can see these two characteristics reflected in the fund's performance;
the year-by-year total returns on page 8 show that short-term returns can
vary widely, while the returns at left show long-term growth.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Magellan 2.03% 43.11% 23.74% 1.00% 22.76% 34.58% -4.51% 41.03% 7.0
1% 24.66%
Competitive funds average -2.03% 28.49% 14.20% 2.59% 14.33% 26.77% -4.72%
37.
08% 7.86% 10.61%
Percentage (%)
Row: 1, Col: 1, Value: 2.03
Row: 1, Col: 2, Value: -2.03
Row: 2, Col: 1, Value: 43.11
Row: 2, Col: 2, Value: 28.49
Row: 3, Col: 1, Value: 23.74
Row: 3, Col: 2, Value: 14.2
Row: 4, Col: 1, Value: 1.0
Row: 4, Col: 2, Value: 2.59
Row: 5, Col: 1, Value: 22.76
Row: 5, Col: 2, Value: 14.33
Row: 6, Col: 1, Value: 34.48
Row: 6, Col: 2, Value: 26.77
Row: 7, Col: 1, Value: -4.51
Row: 7, Col: 2, Value: -4.72
Row: 8, Col: 1, Value: 41.03
Row: 8, Col: 2, Value: 37.08
Row: 9, Col: 1, Value: 7.01
Row: 9, Col: 2, Value: 7.859999999999999
Row: 10, Col: 1, Value: 24.66
Row: 10, Col: 2, Value: 10.61
Magellan
Fund
Competitive
funds
average
THE S&P 500(Registered trademark) is the Standard & Poor's 500
Composite Stock Price Index, a widely recognized, unmanaged index of common
stock prices. The S&P 500 figures assume reinvestment of all dividends
paid by stocks included in the index. They do not, however, include any
allowance for the brokerage commissions or other fees you would pay if you
actually invested in those stocks.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average, which
currently reflects the performance of over 390 mutual funds with
similar objectives. This average, which assumes reinvestment of
distributions, is published by Lipper Analytical Services, Inc.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
<r>THE FUND IN DETAIL</r>
CHARTER
MAGELLAN IS A MUTUAL FUND: an investment that pools shareholders' money and
invests it toward a specified goal. In technical terms, the fund is an
open-end, diversified management investment company. It was organized as a
Massachusetts corporation on December 18, 1962, and was reorganized as a
Massachusetts business trust on October 1, 1984.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. Fidelity will
mail proxy materials in advance, including a voting card and information
about the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, whichchooses the fund's investments and handles
its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East)
assist FMR with foreign investments.
Jeff Vinik is manager and vice president of Magellan, which he has managed
since July 1992. Previously, he managed Growth & Income, Contrafund and
Select Energy Service. Mr. Vinik joined Fidelity in 1986.
Fidelity Distributors Corporation ( FDC) distributes and markets
Fidelity's funds and services. Fidelity Service Co. (FSC) performs
transfer agent servicing functions for the fund.
FMR Corp. is the parent company of these organizations. Through ownership
of voting common stock, Edward C. Johnson 3d (President and a trustee of
the trust), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
A broker-dealer may use a portion of the commissions paid by the fund to
reduce the fund's custodian or transfer agent fees. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry out
the fund's transactions, provided that the fund receives brokerage services
and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND SEEKS CAPITAL APPRECIATION through investments in securities of
domestic, foreign, and multinational issuers. The fund normally invests
primarily in common stocks and securities convertible into common stock.
The fund may invest a portion of its assets in debt securities of all
types, qualities, and maturities issued by domestic and foreign issuers, if
FMR believes that doing so will result in capital appreciation.
Historically, common stocks have shown greater long-term growth potential
than other types of securities. However, stock values fluctuate in response
to the activities of individual companies and general market and economic
conditions.
In selecting domestic securities for the fund, FMR may examine U.S.-based
corporations of all sizes, industries, and geographical markets. In
selecting foreign securities, FMR will favor companies that are large and
well-known, although it may choose smaller firms that it believes offer
unusual value, even if they involve more risk.
The fund may buy securities, including domestic and foreign debt
securities, that pay dividends. However, no emphasis is placed on dividend
income, except when FMR believes this income will have a favorable
influence on the market value of the security.
The fund spreads investment risk by limiting its holdings in any one
company or industry. FMR may use various investment techniques to hedge the
fund's risks, but there is no guarantee that these strategies will work as
FMR intends. When you sell your shares, they may be worth more or less than
what you paid for them.
FMR normally invests the fund's assets according to its investment
strategy. When FMR considers it appropriate for defensive purposes,
however, it may temporarily invest substantially in investment-grade debt
securities.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, and strategies FMR may employ in
pursuit of the fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
fund achieve its goal. As a shareholder, you will receive financial reports
every six months detailing the fund holdings and describing recent
investment activities.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. This ownership interest
often gives the fund the right to vote on measures affecting the company's
organization and operations. Although common stocks have a history of
long-term growth in value, their prices tend to fluctuate in the
short er term, particularly those of smaller companies.
RESTRICTIONS: The fund may not own more than 10% of the outstanding voting
securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "junk bonds") are often
considered to be speculative and involve greater risk of default or price
changes due to changes in the issuer's creditworthiness. The market prices
of these securities may fluctuate more than higher-quality securities and
may decline significantly in periods of general economic difficulty.
The table on page 12 provides a summary of ratings assigned to debt
holdings (not including money market instruments) in the fund's portfolio.
These figures are dollar-weighted averages of month-end portfolio holdings
during fiscal 1994, and are presented as a percentage of total investments.
These percentages are historical and do not necessarily indicate the fund's
current or future debt holdings.
FISCAL 1994 DEBT HOLDINGS, BY RATING
MOODY'S INVESTORS STANDARD &
POOR'S
SERVICE, INC. CORPORATION
Rating Average A Rating Averag
e A
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa 4.24 % AA 4.39 %
Upper-medium grade A A
Medium grade Baa 0.18 % BBB 0.02 %
LOWER QUALITY
Moderately speculative Ba 0.24 % BB 0.20 %
Speculative B 0.91 % B 0.89 %
Highly speculative Caa 0.13 % CCC 0.07 %
Poor quality Ca 0.15% CC 0.00 %
Lowest quality, no interest C C
In default, in arrears - - D 0.15 %
5.85 % 5.72 %
A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF
THE SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT. THE DOLLAR-WEIGHTED
AVERAGE OF DEBT SECURITIES NOT RATED DIRECTLY OR INDIRECTLY BY MOODY'S OR
S&P AMOUNTED TO 1.25 %. THIS MAY INCLUDE SECURITIES RATED BY
OTHER
NATIONALLY RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. FMR
HAS DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER QUALITY ACCOUNT FOR
0 % OF THE FUND'S INVESTMENTS. REFER TO THE FUND'S STATEMENT OF
ADDITIONAL
INFORMATION FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.
RESTRICTIONS: The fund does not currently intend to invest more than 20% of
its total assets in debt securities.
FOREIGN SECURITIES and foreign currencies may involve additional risks.
These include currency fluctuations, risks relating to political or
economic conditions in the foreign country, and the potentially less
stringent investor protection and disclosure standards of foreign markets.
In addition to the political and economic factors that can affect foreign
securities, a governmental issuer may be unwilling to repay principal and
interest when due, and may require that the conditions for payment be
renegotiated. These factors could make foreign investments, especially
those in developing countries, more volatile.
RESTRICTIONS: No more than 40% of the fund's assets may be invested in
companies operating exclusively in one foreign country.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for the fund, or there may be a
requirement that the fund supply additional cash to a borrower on demand.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities , including illiquid securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to the fund.
RESTRICTIONS: The fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: The fund may not invest more than 5% of its total assets in
any one issuer and may not invest more than 25% of its assets in any one
industry. These limitations do not apply to U.S. government securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
FBSI, an affiliate of FMR, is a means of earning income. This practice
could result in a loss or a delay in recovering the fund's securities. The
fund may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraph restates all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraph, can be changed without shareholder approval.
The fund seeks capital appreciation through investments in securities of
domestic, foreign , and multinational issuers. The fund normally
invests primarily in common stock and securities convertible into common
stock, but may also invest in other types of securities in seeking its
objective. No more than 40% of the fund's assets may be invested in
companies operating exclusively in any one foreign country. No emphasis is
placed on dividend income except when FMR believes this income will have a
favorable influence on the market value of the security. The fund may not
invest more than 5% of its total assets in any one issuer, may not own more
than 10% of the outstanding voting securities of a single issuer, and may
not invest more than 25% of its assets in any one industry. The fund may
borrow up to 33% of its total assets for temporary or emergency purposes.
Loans, in the aggregate, may not exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the fund for management fees
and other expenses above a specified limit. FMR retains the ability to be
repaid by the fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease the fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The amount of
the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE
ADJUSTMENT. The performance adjustment either increases or decreases the
management fee, depending on how well the fund has performed relative to
the S&P 500.
Management Basic Performan
ce
fee fee adjustmen
t
=
+/-
THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate
to an individual fund fee rate, and multiplying the result by the fund's
average net assets. The group fee rate is based on the average net assets
of all the mutual funds advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management increase.
For March 1994, the group fee rate was . 32 %. The individual fund fee
rate is .30%. The basic fee rate for fiscal 1994 was . 62 %.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing the
fund's performance to that of the S&P 500 over the most recent 36-month
period. The difference is translated into a dollar amount that is added to
or subtracted from the basic fee. The maximum annualized performance
adjustment rate is + or - .20%.
UNDERSTANDING THE
MANAGEMENT FEE
(checkmark)
The basic fee FMR receives is designed to be responsive to changes in
FMR's total assets under management. Building this variable into the fee
calculation assures shareholders that they will pay a lower rate as FMR's
assets under management increase.
Another variable, the performance adjustment, rewards FMR when the fund
outperforms the S&P 500 (an established index of stock market
performance) and reduces FMR's fee when the fund underperforms this
index.
The total management fee rate for fiscal 1994 was .76%. This rate was
higher than that of most other mutual funds as a result of a positive
performance adjustment.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East 50% of its management fee rate
with respect to the fund's investments that the sub-adviser manages on a
discretionary basis.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform many transactions and accounting
functions. These services include processing shareholder transactions,
valuing the fund's investments, and handling securities loans. In fiscal
1994, the fund paid FSC fees equal to .21 % of its average net
assets.
The fund also pays other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
The fund's portfolio turnover rate for fiscal 1994 was 132 %. This
rate varies from year to year. High turnover rates increase transaction
costs and may increase taxable capital gains. Of course, FMR considers
these effects when evaluating the anticipated benefits of short-term
investing.
<r>YOUR ACCOUNT</r>
DOING BUSINESS
WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(bullet) For mutual funds, 1-800-544-8888
(bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 75 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in the fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
(checkmark)
Fidelity offers the broadest selection of mutual funds in the world.
(bullet) Number of Fidelity mutual funds: over 200
(bullet) Assets in Fidelity mutual funds: over $ 225 billion
(bullet) Number of shareholder accounts: over 15 million
(bullet) Number of investment analysts and portfolio managers: over
200
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications
and typically have lower minimums.
(bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age
and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS
allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR THE FUND: the
offering price and net asset value (NAV). The offering price includes the
3% sales charge, which you pay when you buy shares, unless you qualify for
a reduction or waiver as described on page 29 . When you buy shares
at the offering price, Fidelity deducts 3% and invests the rest at the NAV.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page 1 9 . If there is no application
accompanying this prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(bullet) Mail in an application with a check, or
(bullet) Open your account by exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(Registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
UNDERSTANDING
SHARE PRICE
(checkmark)
Let's say you invest $2,500 at an offering price of $10. Of the $10
offering price, 3% ($.30) is the sales charge, and 97% ($9.70) represents
the NAV. The value of your initial investment will be $2,425 (250 shares
worth $9.70 each), and you will have paid a sales charge of $75.
$2,500 Investment
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 3, Value: 75.0
Row: 1, Col: 4, Value: 75.0
Row: 1, Col: 5, Value: 75.0
Row: 1, Col: 6, Value: 75.0
Row: 1, Col: 7, Value: 75.0
Row: 1, Col: 8, Value: 75.0
Row: 1, Col: 9, Value: 75.0
Row: 1, Col: 10, Value: 75.0
Row: 1, Col: 11, Value: 75.0
Row: 1, Col: 12, Value: 75.0
Row: 1, Col: 13, Value: 75.0
Row: 1, Col: 14, Value: 75.0
Row: 1, Col: 15, Value: 75.0
Row: 1, Col: 16, Value: 75.0
Row: 1, Col: 17, Value: 75.0
Row: 1, Col: 18, Value: 75.0
Row: 1, Col: 19, Value: 75.0
Row: 1, Col: 20, Value: 75.0
Row: 1, Col: 21, Value: 75.0
Row: 1, Col: 22, Value: 75.0
Row: 1, Col: 23, Value: 75.0
Row: 1, Col: 24, Value: 75.0
Row: 1, Col: 25, Value: 75.0
Row: 1, Col: 26, Value: 75.0
Row: 1, Col: 27, Value: 75.0
Row: 1, Col: 28, Value: 75.0
Row: 1, Col: 29, Value: 75.0
Row: 1, Col: 30, Value: 75.0
Row: 1, Col: 31, Value: 75.0
Row: 1, Col: 32, Value: 75.0
Row: 1, Col: 33, Value: 75.0
Row: 1, Col: 34, Value: 75.0
3% sales charge = $75
Value of Investment = $2,425
<TABLE>
<CAPTION>
<S>
<C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE (bullet) Exchange from another (bullet) Exchange from another
1-800-544-7777 Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account.
MAIL (bullet) Complete and sign the (bullet) Make your check
application. Make your payable to "Fidelity
check payable to Magellan Fund."
"Fidelity Magellan Indicate your fund
Fund." Mail to the account number on
address indicated on your check and mail to
the application. the address printed on
your account statement.
(bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
IN PERSON (bullet) Bring your application (bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
WIRE (bullet) Call 1-800-544-7777 to (bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify "Fidelity
Bank Routing Magellan Fund" and
#021001033, include your account
Account #00163053. number and your
Specify "Fidelity name.
Magellan Fund" and
include your new
account number and
your name.
AUTOMATICALLY (bullet) Not available. (bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or
call 1-800-544-6666 to
add to it.
TDD - SERVICE FOR THE DEAF AND HEARING-IMPAIRED: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations
apply:
(bullet) You wish to redeem more than $100,000 worth of shares,
(bullet) Your account registration has changed within the last 30 days,
(bullet) The check is being mailed to
a different address than the one on your account (record address),
(bullet) The check is being made payable to someone other than the account
owner, or
(bullet) The redemption proceeds are being transferred to a Fidelity
account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(bullet) Your name,
(bullet) The fund's name,
(bullet) Your fund account number,
(bullet) The dollar amount or number of shares to be redeemed, and
(bullet) Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
<TABLE>
<CAPTION>
<S> <C> <C>
ACCOUNT TYPE SPECIAL REQUIREMENTS
PHONE All account types (bullet) Maximum check request:
1-800-544-7777 except retirement $100,000
(bullet) For Money Line transfers to
All account types your bank account; minimum:
$10; maximum: $100,000
(bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
MAIL OR IN PERSON Individual, Joint (bullet) The letter of instruction must
Tenants, be signed by all persons
Sole Proprietorship required to sign for
s, UGMA, UTMA transactions, exactly as their
Retirement names appear on the
accounts account.
(bullet) The account owner should
complete a retirement
Trust distribution form. Call
1-800-544-6666 to request
one.
(bullet) The trustee must sign the
letter indicating capacity as
Business or trustee. If the trustee's name
Organization is not in the account
registration, provide a copy
of the trust document
certified within the last 60
days.
Executor, (bullet) At least one person
Administrator, authorized by corporate
Conservator, resolution to act on the
Guardian account must sign the letter.
(bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(bullet) Call 1-800-544-6666 for
instructions.
WIRE All account types (bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
TDD - SERVICE FOR THE DEAF AND HEARING-IMPAIRED: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(bullet) Confirmation statements (after every transaction, except
reinvestments, that affect your account balance or your account
registration)
(bullet) Account statements (quarterly)
(bullet) Financial reports (every six months)
24-HOUR SERVICE
(checkmark)
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
EXCHANGES AND REDEMPTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. The shares you exchange will
carry credit for any sales charge you previously paid in connection with
their purchase.
Note that exchanges out of the fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or revoked,
see page 2 8 .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account. Because of the fund's sales charge, you may not want to set
up a systematic withdrawal plan during a period when you are buying shares
on a regular basis.
FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
<TABLE>
<CAPTION>
<S>
<C> <C>
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(bullet) For existing accounts, call
1-800-544-6666 for an application.
(bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUND A
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(bullet) Changes require a new authorization
form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (bullet) To establish, call 1-800-544-6666 after
bimonthly, your account is opened.
quarterly, or (bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE
CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
</TABLE>
<r>SHAREHOLDER AND ACCOUNT POLICIES</r>
DIVIDENDS, CAPITAL
GAINS, AND TAXES
The fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in May and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. The fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and
capital gain distribution s .
4. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividends and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain
distributions are not subject to the fund's 3% sales charge. Likewise, if
you direct distributions to a fund with a 3% sales charge, you will not pay
a sales charge on those purchases.
When the fund deducts a distribution from its NAV, the reinvestment price
is the fund's NAV at the close of business that day. Cash distribution
checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
(checkmark)
As a fund shareholder, you are entitled to your share of the fund's net
income and gains on its investments. The fund passes its earnings along to
its investors as DISTRIBUTIONS.
The fund earns dividends from stocks and interest from bond, money market,
and other investments. These are passed along as DIVIDEND DISTRIBUTIONS.
The fund realizes capital gains whenever it sells securities for a higher
price than it paid for them. These are passed along as CAPITAL GAIN
DISTRIBUTIONS.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of the se implications .
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them . However,
distributions declared in December and paid in January are taxable as if
they were paid on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back as a taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates the fund's NAV and offering price as
of the close of business of the NYSE, normally 4 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, assets are valued by a method that
the Board of Trustees believes accurately reflects fair value. Foreign
securities are valued on the basis of quotations from the primary market in
which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates.
THE OFFERING PRICE (price to buy one share) is the fund's NAV plus a sales
charge. The sales charge is 3% of the offering price, or 3.09% of the net
amount invested. The REDEMPTION PRICE (price to sell one share) is the
fund's NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page 28 . Purchase orders may be refused if, in FMR's opinion,
they would disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
N ote the following:
(bullet) All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks.
(bullet) Fidelity does not accept cash.
(bullet) When making a purchase with more than one check, each check must
have a value of at least $50.
(bullet) The fund reserves the right to limit the number of checks
processed at one time.
(bullet) If your check does not clear, your purchase will be cancelled and
you could be liable for any losses or fees the fund or its transfer agent
has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING PRICE) OR SELL THEM THROUGH
A BROKER, who may charge you a fee for this service. If you invest through
a broker or other institution, read its program materials for any
additional service features or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements
with FDC may enter confirmed purchase orders on behalf of
customers by phone, with payment to follow no later than the time when the
fund is priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for resulting
fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted.
N ote the following:
(bullet) Normally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect the
fund, it may take up to seven days to pay you.
(bullet) Fidelity Money Line redemptions generally will be credited to
your bank account on the second or third business day after your phone
call.
(bullet) The fund may hold payment on redemptions until it is reasonably
satisfied that investments made by check or Fidelity Money Line have been
collected, which can take up to seven business days.
(bullet) Redemptions may be suspended or payment dates postponed on days
when the NYSE is closed (other than weekends or holidays), when trading on
the NYSE is restricted, or as permitted by the SEC.
TO SELL CERTIFICATE SHARES, call 1-800-544-6666 for instructions. The fund
no longer issues certificate shares.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from the fund's 3% sales charge and may pay a
portion of them to securities dealers who have sold the fund's shares, or
to others, including banks and other financial institutions (qualified
recipients), under special arrangements in connection with FDC's sales
activities. The sales charge paid to qualified recipients is 1.5% of the
fund's offering price.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the fund without reimbursement
from the fund. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(bullet) The fund you are exchanging into must be registered for sale in
your state.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) Before exchanging into a fund, read its prospectus.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage-point difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(bullet) Exchanges may have tax consequences for you.
(bullet) Because excessive trading can hurt fund performance and
shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(bullet) The exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and
Department of Labor regulations. See your plan materials for further
information.
(bullet) The fund reserves the right to refuse exchange purchases
by any person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment objective
and policies, or would otherwise potentially be adversely affected.
(bullet) Your exchanges may be restricted or refused if the fund receives
or anticipates simultaneous orders affecting significant portions of the
fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. The fund's sales charge may be reduced if you invest directly
with Fidelity or through prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you invest, plus the value of your
account, must fall within the ranges shown below. However, purchases
made with assistance or intervention from a financial intermediary are not
eligible. Call Fidelity to see if your purchase qualifies.
Net
Range Sales amount
charge investe
d
$0 - 249,999 3% 3.09%
$250,000 - 2% 2.04%
499,999
$500,000 - 1% 1.01%
999,999
$1,000,000 or none none
more
The sales charge will also be reduced by the percentage of any sales charge
you previously paid on investments in other Fidelity funds (not including
Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for
any sales charge you would have paid if the reductions in the table above
had not existed. These sales charge credits only apply to purchases made in
one of the ways listed below, and only if you continuously owned Fidelity
fund shares or a Fidelity brokerage core account, or participated in The
CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a Fidelity brokerage core account,
including any free credit balance, core money market fund, or margin
availability, to the extent such proceeds were derived f ro m
redemption proceeds from another Fidelity fund.
3. With redemption proceeds from one of Fidelity's Foreign Currency Funds,
if the Foreign Currency Fund shares were originally purchased with
redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page 24 ).
5. By participants in The CORPORATEplan for Retirement Program when shares
are purchased through plan-qualified loan repayments, and for exchanges
into and out of the Managed Income Portfolio.
WAIVERS. The fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more than
200 eligible employees or a minimum of $3 million in plan assets invested
in Fidelity mutual funds. Plan sponsors are encouraged to notify Fidelity
when they first satisfy either of these requirements.
2. To shares in a Fidelity Rollover IRA account purchased with the proceeds
of a distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan that
both qualified for waiver (1) above and had at least some of its assets
invested in Fidelity-managed products.
3. If you are a charitable organization (as defined in Section 501(c)(3) of
the Internal Revenue Code) investing $100,000 or more.
4. If you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code).
5. If you are an investor participating in the Fidelity Trust Portfolios
program.
6. To shares purchased through Portfolio Advisory Services.
7. If you are a current or former trustee or officer of a Fidelity fund or
a current or retired officer, director, or regular employee of FMR
Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or
employee), the spouse of a Fidelity trustee or employee, a Fidelity trustee
or employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a Fidelity
trustee or employee.
8. If you are a bank trust officer, registered representative, or other
employee of a qualified recipient, as defined on page 2 7 .
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), and (5) is contained in the Statement
of Additional Information. A representative of your plan or organization
should call Fidelity for more information.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY MAGELLAN FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 20, 1994
This Statement is not a prospectus but should be read in conjunction with
the fund's current Prospectus (dated May 20, 1994). Please retain this
document for future reference. The fund's financial statements and
financial highlights, included in the Annual Report for the fiscal year
ended March 31, 1994 are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts with Companies Affiliated with FMR
Description of the Fund
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
MAG-ptb-594
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in
values, net assets, or other circumstances will not be considered when
determining whether the investment complies with the fund's investment
policies and limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of the value of the fund's total assets
at market to be invested in the securities of such issuer (other than
obligations of the United States government and its instrumentalities);
(2) purchase the securities of an issuer if, as a result the fund would
own more than 10% of the outstanding voting securities of such issuer;
(3) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(4) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(5) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of "restricted securities;"
(6) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(7) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); and
(9) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
IN ADDITION THE FUND MAY
(10) notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
own or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vi) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(vii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation;
(viii) The fund does not currently intend to purchase warrants,
valued at the lower of cost or market, in excess of 5% of the fund's net
assets. Included in that amount, but not to exceed 2% of the fund's net
assets, may be warrants that are not listed on the New York Stock Exchange
or the American Stock Exchange. Warrants acquired by the fund in units or
attached to securities are not subject to these restrictions.
(ix) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management company with substantially the
same fundamental investment objective, policies, and limitations as the
fund.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S.
government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission, the Board of Trustees has established
and periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. The fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that the fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that the fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against the fund and the risk of actual liability if the fund is involved
in litigation. No guarantee can be made, however, that litigation against
the fund will not be undertaken or liabilities incurred.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment). Investments currently considered
by the fund to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days,
over-the-counter options, and non-government stripped fixed-rate
mortgage-backed securities. Also, FMR may determine some restricted
securities, government-stripped fixed-rate mortgage-backed securities,
loans and other direct debt instruments, and swap agreements to be
illiquid. However, with respect to over-the-counter options the fund
writes, all or a portion of the value of the underlying instrument may be
illiquid depending on the assets held to cover the option and the nature
and terms of any agreement the fund may have to close out the option before
expiration. In the absence of market quotations, illiquid investments are
priced at fair value as determined in good faith by a committee appointed
by the Board of Trustees. If through a change in values, net assets, or
other circumstances, the fund were in a position where more than 10% of its
net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the fund may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to the fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If the fund does not receive scheduled interest
or principal payments on such indebtedness, the fund's share price could be
adversely affected. Loans that are fully secured offer the fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral c ould be liquidated. Indebtedness of
borrowers whose creditworthiness is poor involves substantially greater
risks and may be highly speculative. Borrowers that are in bankruptcy or
restructuring may never pay off their indebtedness, or may pay only a small
fraction of the amount owed. Direct indebtedness of developing countries
also involves a risk that the governmental entities responsible for the
repayment of the debt may be unable, or unwilling, to pay interest and
principal when due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to the fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable
that under emerging legal theories of lender liability, the fund could be
held liable as a co-lender. Direct debt instruments may also involve a
risk of insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to the fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, the fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the
loan, as specified in the loan agreement. Unless, under the terms of the
loan or other indebtedness, the fund has direct recourse against the
borrower, it may have to rely on the agent to apply appropriate credit
remedies against a borrower. If assets held by the agent for the benefit
of the fund were determined to be subject to the claims of the agent's
general creditors, the fund might incur certain costs and delays in
realizing payment on the loan or loan participation and could suffer a loss
of principal or interest.
Direct indebtedness purchased by the fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments
may have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
The fund will set aside appropriate liquid assets in a segregated custodial
account to cover its potential obligations under standby financing
commitments.
The fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations 1 and 6).
For purposes of these limitations, the fund generally will treat the
borrower as the "issuer" of indebtedness held by the fund. In the case of
loan participations where a bank or other lending institution serves as
financial intermediary between the fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict the fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is
in effect secured by the value (at least equal to the amount of the agreed
upon resale price and marked to market daily) of the underlying security.
The fund may engage in repurchase agreements with respect to any security
in which it is authorized to invest. While it does not presently appear
possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities,
as well as delays and costs to the fund in connection with bankruptcy
proceedings), it is the fund's current policy to limit repurchase agreement
transactions to those parties whose creditworthiness has been reviewed and
found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
INTERFUND BORROWING PROGRAM. The fund has received permission from the SEC
to lend money to and borrow money from other funds advised by FMR or its
affiliates. Interfund loans and borrowings normally will extend overnight,
but can have a maximum duration of seven days. Loans may be called on one
day's notice. The fund will lend through the program only when the returns
are higher than those available at the same time from other short-term
instruments (such as repurchase agreements), and will borrow through the
program only when the costs are equal to or lower than the cost of bank
loans. The fund may have to borrow from a bank at a higher interest rate
if an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows the fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may
be delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that the fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which the fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease the fund's exposure to long- or
short-term interest rates (in the U.S. or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names. The fund is not
limited to any particular form of swap agreement if FMR determines it is
consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a fee
by the other party. For example, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines
elements of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of the fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from the fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. The fund expects to be able to
eliminate its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
The fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If the
fund enters into a swap agreement on a net basis, it will segregate assets
with a daily value at least equal to the excess, if any, of the fund's
accrued obligations under the swap agreement over the accrued amount the
fund is entitled to receive under the agreement. If the fund enters into a
swap agreement on other than a net basis, it will segregate assets with a
value equal to the full amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. The fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values
may decline substantially if the issuer's creditworthiness deteriorates.
Recent issuers of indexed securities have included banks, corporations, and
certain U.S. government agencies. Indexed securities may be more volatile
than the underlying instruments.
FOREIGN INVESTMENTS. Foreign investments can involve significant risks in
addition to the risks inherent in U.S. investments. The value of
securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar.
Foreign securities markets generally have less trading volume and less
liquidity than U.S. markets, and prices on some foreign markets can be
highly volatile. Many foreign countries lack uniform accounting and
disclosure standards comparable to those applicable to U.S. companies, and
it may be more difficult to obtain reliable information regarding an
issuer's financial condition and operations. In addition, the costs of
foreign investing, including withholding taxes, brokerage commissions, and
custodial costs, are generally higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including
those involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be
difficult to enforce legal rights in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention.
There may be a greater possibility of default by foreign governments or
foreign government-sponsored enterprises. Investments in foreign countries
also involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects.
The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities.
The fund may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject
to transfer restrictions may be marketable abroad, they may be less liquid
than foreign securities of the same class that are not subject to such
restrictions.
American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs) are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.
FOREIGN CURRENCY TRANSACTIONS. The fund may hold foreign currency deposits
from time to time, and may convert dollars and foreign currencies in the
foreign exchange markets. Currency conversion involves dealer spreads and
other costs, although commissions usually are not charged. Currencies may
be exchanged on a spot (i.e., cash) basis, or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. Forward contracts generally are traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
The fund may use currency forward contracts to manage currency risks and to
facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the fund.
In connection with purchases and sales of securities denominated in foreign
currencies, the fund may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's
settlement date. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." FMR expects to enter into settlement hedges
in the normal course of managing the fund's foreign investments. The fund
could also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities
denominated in foreign currency, even if the specific investments have not
yet been selected by FMR.
The fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For
example, if the fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in the pound's value. Such
a hedge (sometimes referred to as a "position hedge") would tend to offset
both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. The fund could also
hedge the position by selling another currency expected to perform
similarly to the pound sterling - for example, by entering into a forward
contract to sell Deutsche marks or European Currency Units in return for
U.S. dollars. This type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost, yield, or efficiency, but
generally will not hedge currency exposure as effectively as a simple hedge
into U.S. dollars. Proxy hedges may result in losses if the currency used
to hedge does not perform similarly to the currency in which the hedged
securities are denominated.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of forward currency contracts will depend on FMR's skill in
analyzing and predicting currency values. Forward contracts may
substantially change the fund's investment exposure to changes in currency
exchange rates, and could result in losses to the fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged the fund by selling that currency in exchange for
dollars, the fund would be unable to participate in the currency's
appreciation. If FMR hedges currency exposure through proxy hedges, the
fund could realize currency losses from the hedge and the security position
at the same time if the two currencies do not move in tandem. Similarly,
if FMR increases the fund's exposure to a foreign currency, and that
currency's value declines, the fund will realize a loss. There is no
assurance that FMR's use of forward currency contracts will be advantageous
to the fund or that it will hedge at an appropriate time. The policies
described in this section are non-fundamental policies of the fund.
LOWER-RATED DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession. In fact, from 1989 to 1991, the percentage
of lower-rated debt securities that defaulted rose significantly above
prior levels, although the default rate decreased in 1992.
The market for lower-rated debt securities may be thinner and less active
than that for higher-rated debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not
available, lower-rated debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-rated debt
securities and the fund's ability to sell these securities.
Since the risk of default is higher for lower-rated debt securities, FMR's
research and credit analysis are an especially important part of managing
securities of this type held by the fund. In considering investments for
the fund, FMR will attempt to identify those issuers of high-yielding debt
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
The fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
SHORT SALES "AGAINST THE BOX . " If the fund enters into a short sale
against the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales against the box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The fund intends to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the fund can
commit assets to initial margin deposits and option premiums.
In addition, the fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the fund's investments in futures contracts and
options, and the fund's policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees
to purchase a specified underlying instrument at a specified future date.
When the fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Composite Stock
Price Index (S&P 500). Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund sells a
futures contract, by contrast, the value of its futures position will tend
to move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of the fund, the fund may
be entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund
pays the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the fund assumes the obligation to pay
the strike price for the option's underlying instrument if the other party
to the option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those
of writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
COMBINED POSITIONS. The fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, the fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple
trades, they result in higher transaction costs and may be more difficult
to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the fund's current or
anticipated investments exactly. The fund may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which it typically invests,
which involves a risk that the options or futures position will not track
the performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the fund
to enter into new positions or close out existing positions. If the
secondary market for a contract is not liquid because of price fluctuation
limits or otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund's access to other assets held to cover its options or
futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows the
fund greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
fund may purchase and sell currency futures and may purchase and write
currency options to increase or decrease its exposure to different foreign
currencies. The fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
the fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect
the fund against a price decline resulting from deterioration in the
issuer's creditworthiness. Because the value of the fund's
foreign-denominated investments changes in response to many factors other
than exchange rates, it may not be possible to match the amount of currency
options and futures to the value of the fund's investments exactly over
time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply
with guidelines established by the SEC with respect to coverage of options
and futures strategies by mutual funds, and if the guidelines so require
will set aside appropriate liquid assets in a segregated custodial account
in the amount prescribed. Securities held in a segregated account cannot
be sold while the futures or option strategy is outstanding, unless they
are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the fund's assets
could impede portfolio management or the fund's ability to meet redemption
requests or other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the management
contract. Since FMR has granted investment management authority to the
sub-advisers (see the section entitled "Management Contract") the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to :
the size and type of the transaction; the nature and character of the
markets for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Commissions for foreign investments traded on foreign exchanges
will generally be higher than for U.S. investments and may not be subject
to negotiation.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which
FMR or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with
execution considerations) in accordance with a ranking of broker-dealers
determined periodically by FMR's investment staff based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the fund. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the fund and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI)
and Fidelity Brokerage Services Ltd. (FBSL), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services. Prior
to September 4, 1992, FBSL operated under the name Fidelity Portfolio
Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity
International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr.
Johnson 3d, Johnson family members, and various trusts for the benefit of
the Johnson family own, directly or indirectly, more than 25% of the voting
common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by the fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain
requirements are satisfied. Pursuant to such requirements, the Board of
Trustees has authorized FBSI to execute portfolio transactions on national
securities exchanges in accordance with approved procedures and applicable
SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
For the fiscal years ended March 31, 1994 and 1993, the fund's portfolio
turnover rates were 132 % and 155%, respectively.
For fiscal 1994, 1993, and 1992, the fund paid brokerage commissions of
$72,473,679, $62,757,285 and $55,087,234, respectively. During fiscal
1994, $43,161,016 or approximately 60% of these commissions were paid to
brokerage firms that provided research services, although the provision of
such services was not necessarily a factor in the placement of all of this
business with such firms. The fund pays both commissions and spreads in
connection with the placement of portfolio transactions; FBSI is paid on a
commission basis. During fiscal 1994, 1993, and 1992, the fund paid
brokerage commissions of $24,771,021, $20,714,134 and, $19,776,163,
respectively, to FBSI. During fiscal 1994, this amounted to approximately
3 4% of the aggregate brokerage commissions paid by the fund for
transactions involving approximately 4 6 % of the aggregate
dollar amount of transactions in which the fund paid brokerage commissions.
The difference in the percentage of brokerage commissions paid to and the
percentage of the dollar amount of transactions effected through FBSI is a
result of the low commission rates charged by FBSI.
During fiscal 199 3 and 1992 the fund paid brokerage commissions of
$38,938 and $114,458, respectively, to FBSL. During fiscal 1994 the
fund paid no brokerage commission to FBSL.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment whether
it would be advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each
fund. In some cases this system could have a detrimental effect on the
price or value of the security as far as the fund is concerned. In other
cases, however, the ability of the fund to participate in volume
transactions will produce better executions and prices for the fund. It is
the current opinion of the Trustees that the desirability of retaining FMR
as investment adviser to the fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Equity securities for which the
primary market is the U.S. are valued at last sale price or, if no sale has
occurred, at the closing bid price. Most e quity securities for
which the primary market is outside the U.S. are valued at last sale price
or, if no sale has occurred, at the closing bid price. Most e quity
securities for which the primary market is outside the U.S. are valued
using the official closing price or the last sale price in the principal
market where they are traded. If the last sale price (on the local
exchange) is unavailable, the last evaluated quote or last bid price is
normally used. Short-term securities are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. Convertible and f ixed-income securities are valued
primarily by a pricing service that uses a vendor security valuation matrix
which incorporates both dealer-supplied valuations and electronic data
processing techniques. This two fold approach is believed to more
accurately reflect fair value because it takes into account appropriate
factors such as institutional trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading
characteristics, and other market data, without exclusive reliance upon
quoted, exchange, or over-the-counter prices. Use of pricing services has
been approved by the Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bond, U.S. government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by the fund are
determined as of such time for the purpose of computing the fund's net
asset value per share (NAV). Foreign security prices are furnished by
independent brokers or quotation services which express the value of
securities in their local currency. FSC gathers all exchange rates daily
at the close of the NYSE using the last quoted price on the local currency
and then translates the value of foreign securities from their local
currency into U.S. dollars. Any changes in the value of forward contracts
due to exchange rate fluctuations and days to maturity are included in the
calculation of NAV. If an extraordinary event that is expected to
materially affect the value of a portfolio security occurs after the close
of an exchange on which that security is traded, then the security will be
valued as determined in good faith by a committee appointed by the Board of
Trustees.
PERFORMANCE
The fund may quote its performance in various ways. All performance
information supplied by the fund in advertising is historical and is not
intended to indicate future returns. The fund's share price and total
returns fluctuate in response to market conditions and other factors, and
the value of fund shares when redeemed may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's net asset
value per share (NAV) over the period. Average annual returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in the fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative return of 100% over
ten years would produce an average annual total return of 7.18%, which is
the steady annual rate of return that would equal 100% growth on a
compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors should
realize that the fund's performance is not constant over time, but changes
from year to year, and that average annual returns represent averaged
figures as opposed to the actual year-to-year performance of the fund.
In addition to average annual total returns, the fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. An example of this type of
illustration is given below. Total returns may be quoted on a before-tax
or after-tax basis, and may or may not take the fund's 3% sales charge into
account. Excluding the fund's sales charge from a total return calculation
produces a higher total return figure. Total returns and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using the fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the fund
and reflects all elements of its return. Unless otherwise indicated, the
fund's adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. The fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving average
is the average of each day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine adjusted closing NAVs from the
last business day of each week with moving averages for a specified period
to produce indicators showing when an NAV has crossed, stayed above, or
stayed below its moving average. On March 25, 1994, the 13-week and
39-week long-term moving averages were $ 72.90 and $ 70.35,
respectively.
HISTORICAL FUND RESULTS. The following table shows the income and capital
elements of the fund's cumulative total return for the ten years ended
March 31, 1994. The table compares the fund's return to the record of the
Standard & Poor's 500 Composite Stock Price Index (S&P 500), the
Dow Jones Industrial Average (DJIA), and the cost of living (measured by
the Consumer Price Index or CPI) over the same period. The S&P 500 and
DJIA comparisons are provided to show how the fund's total return compared
to the record of a broad average of common stock prices and a narrower set
of stocks of major industrial companies, respectively, over the same
period. The fund has the ability to invest in securities not included in
either index, and its portfolio may or may not be similar in composition to
the indices. The S&P 500 and DJIA are based on the prices of unmanaged
groups of stocks and, unlike the fund's returns, their returns do not
include the effect of paying brokerage commissions and other costs of
investing.
During the period from March 31, 1984 through March 31, 1994, a
hypothetical $10,000 investment in Fidelity Magellan Fund would have grown
to $54,817, after deducting the fund's 3% sales charge and assuming all
distributions were reinvested. This was a period of widely fluctuating
stock prices and should not be considered representative of the dividend
income or capital gain or loss that could be realized from an investment in
the fund today.
FIDELITY MAGELLAN FUND INDICES
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
<C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Cost
Year Ended $10,000 Dividend Capital Gain Total
of
March 31 Investment Distributions Distributions Value
S&P 500 DJIA
Living
1994
$ 19,207 $ 5,429 $ 30,181 $ 54,817
$ 39,6 63 $ 44,644 $ 14,347
1993 18,855 4,784 24,900
4 8,5 3 8 39,085 41,035 13,996
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
<C> <C>
1992 18,769 3,884 18,813 41,466
33,913 37,517 13,577
1991 17,863 2,955 14,782 35,600
30,53 6 32,747 13,158
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
<C> <C> <C>
1990 16,144 2,193 12,023 30,360
26,694 29,290 12,544
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
<C> <C>
1989 14,579 1,447 9,207 25,233
22,380 23,895 11,920
1988 12,149 817 7,673 20,639
18,943 19,982 11,355
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
<C> <C> <C>
1987 16,488 705 5,648 22,840
20,663 22,429 10,926
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
<C> <C> <C>
1986 15,246 488 2,647 18,380
16,371 17,102 10,604
1985 10,383 123 1,232 11,738
11,890 11,426 10,370
</TABLE>
Explanatory Notes: With an initial investment of $10,000 made on March 31,
198 4 , the net amount invested in fund shares was $9,700 (assuming
the fund's current 3% sales charge had been in effect at that time). The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$38,243. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
the cash payments for the period would have come to $2,333 for income
dividends and $13,312 for capital gain distributions. Tax consequences of
different investments have not been factored into the above figures.
The fund's performance may be compared to the performance of other mutual
funds in general, or to the performance of particular types of mutual
funds. These comparisons may be expressed as mutual fund rankings prepared
by Lipper Analytical Services, Inc. (Lipper), an independent service
located in Summit, New Jersey that monitors the performance of mutual
funds. Lipper generally ranks funds on the basis of total return, assuming
reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. In addition to the mutual fund rankings, the fund's
performance may be compared to mutual fund performance indices prepared by
Lipper.
From time to time, the fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks. Mutual funds differ from bank
investments in several respects. For example, the fund may offer greater
liquidity or higher potential returns than CDs, and the fund does not
guarantee your principal or your return.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. For
example, Fidelity's FundMatchsm Program includes a workbook describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives. Materials may also include discussions of Fidelity's three
asset allocation funds and other Fidelity funds, products, and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote
financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques. Fidelity may also reprint, and use
as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund shareholders.
The fund may present its fund number, Quotron Trademark number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. The fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may compare
these measures to those of other funds. Measures of volatility seek to
compare the fund's historical share price fluctuations or total returns to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate the fund's price movements over specific
periods of time. Each point on the momentum indicator represents the
fund's percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at periodic
intervals, thereby purchasing fewer shares when prices are high and more
shares when prices are low. While such a strategy does not assure a profit
or guard against loss in a declining market, the investor's average cost
per share can be lower than if fixed numbers of shares are purchased at the
same intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
The fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of March 31, 1994, FMR managed approximately $ 140 billion in
equity fund assets with over 15 million shareholders as defined and
tracked by Lipper. This figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in the
United States, making FMR America's leading equity (stock) fund manager.
As of March 31, 1994, Fidelity Magellan Fund had approximately $ 33
billion in assets with over 1.7 million shareholders .
This figure represents the largest amount of equity fund assets under
management by a mutual fund, making Magellan America's largest equity fund.
From time to time, the fund may use any of the above information in its
advertising and sales literature.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
As provided for in Rule 22d-1 under the Investment Company Act of 1940 (the
1940 Act), FDC exercises its right to waive the fund's 3% sales charge on
shares acquired through reinvestment of dividends and capital gain
distributions or in connection with the fund's merger with or acquisition
of any investment company or trust.
In addition, the fund's sales charge will not apply (1) if you buy shares
as part of an employee benefit plan (including the Fidelity-sponsored
403(b) and corporate IRA programs but otherwise as defined in the Employee
Retirement Income Security Act) maintained by a U.S. employer and having
more than 200 eligible employees, or a minimum of $3,000,000 in plan assets
invested in Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary group
of corporations (within the meaning of Section 1563(a)(1) of the Internal
Revenue Code, with "50%" substituted for "80%") any member of which
maintains an employee benefit plan having more than 200 eligible employees,
or a minimum of $3,000,000 in plan assets invested in Fidelity mutual
funds, or as part of an employee benefit plan maintained by a non-U.S.
employer having 200 or more eligible employees, or a minimum of $3,000,000
in plan assets invested in Fidelity mutual funds, the assets of which are
held in a bona fide trust for the exclusive benefit of employees
participating therein; (2) to shares purchased by an insurance company
separate account used to fund annuity contracts purchased by employee
benefit plans (including 403(b) programs, but otherwise as defined in the
Employee Retirement Income Security Act), which, in the aggregate, have
either more than 200 eligible employees or a minimum of $3,000,000 in
assets invested in Fidelity funds; (3) to shares in a Fidelity IRA account
purchased (including purchases by exchange) with the proceeds of a
distribution from an employee benefit plan provided that: (i) at the time
of the distribution, the employer, or an affiliate (as described in
exemption (1) above) of such employer, maintained at least one employee
benefit plan that qualified for exemption (1) and that had at least some
portion of its assets invested in one or more mutual funds advised by FMR,
or in one or more accounts or pools advised by Fidelity Management Trust
Company; and (ii) the distribution is transferred from the plan to a
Fidelity Rollover IRA account within 60 days from the date of the
distribution; (4) if you are a charitable organization (as defined in
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more;
(5) if you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code); (6) if you are an
investor participating in the Fidelity Trust Portfolios program (these
investors must make initial investments of $100,000 or more in Trust
Portfolios funds and must, during the initial six-month period, reach and
maintain an aggregate balance of at least $500,000 in all accounts and
subaccounts purchased through the Trust Portfolios program); (7) to shares
purchased through Portfolio Advisory Services; (8) if you are a current or
former Trustee or officer of a Fidelity fund or a current or retired
officer, director, or regular employee of FMR Corp. or its direct or
indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a
Fidelity Trustee or employee, a Fidelity Trustee or employee acting as
custodian for a minor child, or a person acting as trustee of a trust for
the sole benefit of the minor child of a Fidelity Trustee or employee; or
(9) if you are a bank trust officer, registered representative, or other
employee of a Qualified Recipient. Qualified Recipients are securities
dealers or other entities, including banks and other financial
institutions, who have sold the fund's shares under special arrangements in
connection with FDC's sales activities. FDC has chosen to waive the fund's
sales charge in these instances because of efficiencies involved in sales
of shares to these investors.
The fund's sales charge may be reduced to reflect sales charges previously
paid, or that would have been paid absent a reduction as noted in the
prospectus, in connection with investments in other Fidelity funds. This
includes reductions for investments in the following prototype or
prototype-like retirement plans sponsored by FMR or FMR Corp.: The
Fidelity IRA, The Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP,
The Fidelity Retirement Plan, Fidelity Defined Benefit Plan, The Fidelity
Group IRA, The Fidelity 403(b) Program, The Fidelity Investments 401(a)
Prototype Plan for Tax-Exempt Employers, and The CORPORATEplan for
Retirement (Profit Sharing and Money Purchase Plan).
The fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1994:
Washington's Birthday (observed), Good Friday, Memorial Day (observed),
Independence Day (observed), Labor Day, Thanksgiving Day, and Christmas Day
(observed). Although FMR expects the same holiday schedule, with addition
of New Year's Day, to be observed in the future, the NYSE may modify its
holiday schedule at any time.
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, the fund's NAV may be affected on days when investors
do not have access to the fund to purchase or redeem shares.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the fund's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement
may be waived if (i) the only effect of a modification would be to reduce
or eliminate an administrative fee, redemption fee, or deferred sales
charge ordinarily payable at the time of exchange, or (ii) the fund
suspends the redemption of shares to be exchanged as permitted under the
1940 Act or the rules and regulations thereunder, or the fund to be
acquired suspends the sale of its shares because it is unable to invest
amounts effectively in accordance with its investment objective and
policies.
In the Prospectus, the fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of the fund's income may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that the fund's income is derived from qualifying dividends.
Because the fund may earn other types of income, such as interest income
from securities loans, non-qualifying dividends, and short-term capital
gains, the percentage of dividends from the fund that qualify for the
deduction generally will be less than 100%. The fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of the fund's dividends
derived from certain U.S. government obligations may be exempt from state
and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income, and therefore will
increase (decrease) dividend distributions. The fund will send each
shareholder a notice in January describing the tax status of dividends and
capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of the fund and such shares are held
six months or less and are sold at a loss, the portion of the loss equal to
the amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes.
Short-term capital gains distributed by the fund are taxable to
shareholders as dividends, not as capital gains. Distributions from
short-term capital gains do not qualify for the dividends-received
deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Because the fund does
not currently anticipate that securities of foreign issuers will constitute
more than 50% of its total assets at the end of its fiscal year,
shareholders should not expect to claim a foreign tax credit or deduction
on their federal income tax returns with respect to foreign taxes withheld.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. The fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit the fund's
investments in such instruments.
If the fund purchases shares in certain foreign investment entities,
defined as passive foreign investment companies (PFICs) in the Internal
Revenue Code, it may be subject to U.S. federal income tax on a portion of
any excess distribution or gain from the disposition of such shares.
Interest charges may also be imposed on the fund with respect to deferred
taxes arising from such distributions or gains.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on distributions received from the fund. Investors should
consult their tax advisers to determine whether the fund is suitable to
their particular situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. FMR U.K. and FMR Far East, both wholly owned
subsidiaries of FMR formed in 1986, supply investment research, and may
supply portfolio management services, to FMR in connection with certain
funds advised by FMR. Analysts employed by FMR, FMR U.K., and FMR Far East
research and visit thousands of domestic and foreign companies each year.
FMR Texas Inc., a wholly owned subsidiary of FMR formed in 1989, supplies
portfolio management and research services in connection with certain money
market funds advised by FMR.
TRUSTEES AND OFFICERS
The fund's Trustees and executive officers are listed below. Except as
indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. Those Trustees who are "interested persons" (as defined in the
Investment Company Act of 1940) by virtue of their affiliation with either
the fund or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc., and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is a
consultant to Western Mining Corporation (1994). Prior to February 1994, he
was President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Sanifill Corporation (non-hazardous
waste, 1993) and CH2M Hill Companies (engineering). In addition, he served
on the Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as
a Trustee of First Union Real Estate Investments, Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee of Corporate Property Investors, the EPS
Foundation at Trinity College, the Naples Philharmonic Center for the Arts,
and Rensellaer Polytechnic Institute, and he is a member of the Advisory
Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership
Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
JEFFREY VINIK, Vice President of the fund (1992), is a Vice President of
FMR.
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of
FDC.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the fund based on their basic trustee fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
As of March 31, 1994, the Trustees and officers owned in the
aggregate less than 1 % of the outstanding shares of the fund .
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under FMR's management contract with the fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments, and
compensates all officers of the fund, all Trustees who are "interested
persons" of the fund or FMR, and all personnel of the fund or of FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
law; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, the fund pays all of its expenses, without limitation, that are not
assumed by those parties. The fund pays for typesetting, printing, and
mailing proxy materials to shareholders, legal expenses, and the fees of
the custodian, auditor, and non-interested Trustees. Although the fund's
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, the fund has entered into a
revised transfer agent agreement with FSC, pursuant to which FSC bears the
cost of providing these services to existing shareholders. Other expenses
paid by the fund include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company Institute
dues, and the costs of registering shares under federal and state
securities laws. The fund is also liable for such non-recurring expenses
as may arise, including costs of any litigation to which the fund may be a
party and any obligation it may have to indemnify the fund's officers and
Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated April 1,
1994, which was approved by shareholders on March 23, 1994. For the
services of FMR under the contract, the fund pays a monthly management fee
composed of the sum of two elements: a basic fee and a performance
adjustment based on a comparison of the fund's performance to that of the
Standard & Poor's 500 Composite Stock Price Index (S&P 500).
COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two
elements: a group fee rate and individual fund fee rate. The group fee
rate is based on the monthly average net assets of all of the registered
investment companies with which FMR has management contracts and is
calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown on the left. On the right, the effective fee rate schedule
shows the actual results of cumulatively applying the annualized rates at
varying asset levels. For example the effective annual fee rate at $ 250
billion of group net assets - their approximate level for March
1994 - was .3220 %, which is the weighted average of the
respective fee rates for each level of group net assets up to $ 250
billion.
<TABLE>
<CAPTION>
<S> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
</TABLE>
Average Group
Group Annualized Group Effective Annual
Assets Rate Net Assets Fee Rates
0 - $3 billion .520% $ 0.5 billion .5200%
3 - 6 .490 25 .4238
6 - 9 .460 50 .3823
9 - 12 .430 75 .3626
12 - 15 .400 100 .3512
15 - 18 .385 125 .3430
18 - 21 .370 150 .3371
21 - 24 .360 175 .3325
24 - 30 .350 200 .3284
30 - 36 .345 225 .3253
36 - 42 .340 250 .3223
42 - 48 .335 275 .3198
48 - 66 .325 300 .3175
66 - 84 .320 325 .3153
84 - 102 .315 350 .3133
102 - 138 .310
138 - 174 .305
174 - 228 .300
228 - 282 .295
282 - 336 .290
Over 336 .285
The individual fund fee rate is .30%. Based on the average net assets of
funds advised by FMR for March 1994 the annual basic fee rate would be
calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
</TABLE>
.3220 % + .30% = .6220 %
One twelfth (1/12) of this annual basic fee rate is then applied to the
fund's net assets averaged for the current month, giving a dollar amount,
which is the fee for that month.
Prior to January 1, 1992, the group fee rate was based on a schedule
with breakpoints ending at .310% for average group assets in excess of $102
billion. The group fee breakpoints shown for average group assets between
$102 billion and $174 billion were voluntarily adopted by FMR on January 1,
1992. Additional breakpoints for average group assets in excess of $174
billion were voluntarily adopted by FMR on November 1, 1993. The fund's
management contract dated April 1, 1994 reflects these extensions of the
group fee rate schedule. With the exception of changing the group fee
rate schedule, the terms of the current contract are identical to those of
the prior contract.
FMR adopted the revised group fee rate schedule in part in accordance with
the settlement reached in the Labaton v. Fidelity Management &
Research, et al. (Civ. Action No. 82-270-MA) litigation, brought against
the fund on February 1, 1984 and approved by the United States District
Court for the District of Massachusetts on April 7, 1986. Under the terms
of the settlement, FMR agreed to reduce its management fee, pending
shareholder approval, through a revision of its group fee rate schedule as
described above. The terms of the settlement also required that FMR will
not seek an increase in fee rates paid by the fund to FMR for a period of
five years.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward
or downward adjustment, depending upon whether, and to what extent, the
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of the S&P 500 over the same period. The
performance period consists of the most recent month plus the previous 35
months. Each percentage point of difference (up to a maximum difference of
+ 10) is multiplied by a performance adjustment rate of .02%. Thus, the
maximum annualized adjustment rate is + .20%. This performance comparison
is made at the end of each month. One twelfth of this rate is then applied
to the fund's average net assets for the entire performance period, giving
a dollar amount which is added to (or subtracted from) the basic fee.
The fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if reinvested in
fund shares at the net asset value as of the record date for payment. The
record of the S&P 500 is based on change in value and is adjusted for
any cash distributions from the companies whose securities compose the
S&P 500.
Because the adjustment to the basic fee is based on the fund's performance
compared to the investment record of the S&P 500, the controlling
factor is not whether the fund's performance is up or down per se, but
whether it is up or down more or less than the record of the S&P 500.
Moreover, the comparative investment performance of the fund is based
solely on the relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
During the fiscal years ended March 31, 1994, 1993, and 1992, FMR received
$ 226,502,185 , $161,242,950, and $135,671,227, respectively, for its
services as investment adviser to the fund. These fees, which include both
the basic fee and the performance adjustment, were equivalent to
.76 %, .75%, and .78%, respectively, of the average net assets of the
fund for each of those years. For fiscal 1994, 1993, and 1992, the upward
performance adjustments amounted to $ 40,010,474 , $24,964,876, and
$24,853,118, respectively.
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 1/2% of the first $30 million, 2% of the next
$70 million, and 1/2 % of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. FMR has entered into sub-advisory agreements with FMR
U.K. and FMR Far East. Pursuant to the sub-advisory agreements, FMR may
receive investment advice and research services outside the United States
from the sub-advisers. FMR may also grant the sub-advisers investment
management authority as well as the authority to buy and sell securities if
FMR believes it would be beneficial to the fund.
Currently, FMR U.K. and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin. FMR U.K. and FMR Far East are wholly owned subsidiaries of FMR.
Under the sub-advisory agreements FMR pays the fees of FMR U.K. and FMR Far
East. For providing non-discretionary investment advice and research
services, the sub-advisers are compensated as follows:
(bullet) FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(bullet) FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by the
sub-adviser on a discretionary basis.
For providing investment advice and research services, the fees paid to
the sub-advisers for fiscal 1994, 1993, and 1992 were as follows:
Fiscal Year FMR U.K. FMR Far East
1994 $264,093 $435,904
1993 $543,880 $798,687
199 2 $564,740 $692,842
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders servicing agent for
the fund. Under the fund's contract with FSC, the fund pays an annual fee
of $26.03 per basic retail account with a balance of $5,000 or more, $15.31
per basic retail account with a balance of less than $5,000, and a
supplemental activity charge of $6.11 for monetary transactions. These
fees and charges are subject to annual cost escalation based on postal rate
changes and changes in wage and price levels as measured by the National
Consumer Price Index for Urban Areas. With respect to certain
institutional client master accounts, the fund pays FSC a per account fee
of $95.00 and monetary transaction charges of $20.00 and $17.50, depending
on the nature of services provided. With respect to certain broker-dealer
master accounts, the fund pays FSC a per-account fee of $30, and a charge
of $6 for monetary transactions. Fees for certain institutional retirement
plan accounts are based on the net assets of all such accounts in the fund.
Under the current contract, FSC pays out-of-pocket expenses associated with
providing transfer agent services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
shareholders, with the exception of proxy statements. Transfer agent fees,
including reimbursement for out-of-pocket expenses, paid to FSC for the
fiscal years ended March 31, 1994, 1993, and 1992 were $ 66,504,149,
$49,705,683, and $41,482,323, respectively. If a portion of the fund's
brokerage commissions had not resulted in payment of certain of these fees,
the fund would have paid transfer agent fees of $71,784,563 for fiscal
1994.
The fund's contract with FSC also provides that FSC will perform the
calculations necessary to determine the fund's net asset value per share
and dividends, and maintain the fund's accounting records. Prior to July
1, 1991, the annual fee for these pricing and bookkeeping services was
based on two schedules, one pertaining to the fund's average net assets,
and one pertaining to the type and number of transactions the fund made.
The fee rates in effect as of July 1, 1991 are based on the fund's average
net assets, specifically, .06% for the first $500 million of average net
assets and .03% for average net assets in excess of $500 million. The fee
is limited to a minimum of $45,000 and a maximum of $750,000 per year.
Pricing and bookkeeping fees, including related out-of-pocket expenses,
paid to FSC for fiscal 1994, 1993, and 1992, were $ 852,476 ,
$846,447, and $884,596, respectively.
From October 31, 1989 to October 18, 1991, Fidelity Management Trust
Company (FMTC) served as custodian of the fund's assets. FMTC, an
affiliate of FMR, was organized as a Massachusetts trust company in 1981.
FMTC took no part in determining the investment policies of the fund or in
deciding which securities were purchased or sold by the fund. Effective
October 19, 1991, Brown Brothers Harriman & Co. was appointed custodian
of the fund's assets. Custodian fees paid to FMTC for the period April 1,
1991 to October 18, 1991 were $618,481 for its services as custodian to
the fund.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreement calls for FDC to
use all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FDC. Sales charge revenue paid to FDC for
fiscal 1994, 1993, and 1992, amounted to $ 44,752,027 , $28,821,876,
and $38,609,038, respectively.
DESCRIPTION OF THE FUND
FUND ORGANIZATION. Fidelity Magellan Fund is an open-end management
investment company originally organized as a Massachusetts corporation on
December 31, 1962. On June 19, 1981, Salem Fund, Inc. was merged with the
fund, at which time the fund's name was changed from Magellan Fund, Inc. to
Fidelity Magellan Fund, Inc. On October 1, 1984 the fund was reorganized
as a Massachusetts business trust, at which time its name was changed to
Fidelity Magellan Fund.
In the event that FMR ceases to be the investment adviser to the fund, the
right of the fund to use the identifying name "Fidelity" may be withdrawn.
The fund's Declaration of Trust permits the Trustees to create additional
funds.
SHAREHOLDER AND TRUSTEE LIABILITY. The fund is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the fund shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
fund or the Trustees shall include a provision limiting the obligations
created thereby to the fund and its assets. The Declaration of Trust
provides for indemnification out of the fund's property of any shareholder
held personally liable for the obligations of the fund. The Declaration of
Trust also provides that the fund shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. The fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value per share you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of redemption,
and the privilege of exchange are described in the Prospectus. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing 10%
or more of the fund may, as set forth in the Declaration of Trust, call
meetings of the fund for any purpose, including the purpose of voting on
removal of one or more Trustees. The fund may be terminated upon the sale
of its assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by the vote of the
holders of a majority of the fund, as determined by the current value of
each shareholder's investment in the fund. If not so terminated, the fund
will continue indefinitely. The fund may invest all its assets in another
investment company.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of the fund. The custodian is
responsible for the safekeeping of the fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the fund or in deciding which
securities are purchased or sold by the fund. The fund may, however,
invest in obligations of the custodian and may purchase securities from or
sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the fund's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. The Boston branch of the fund's custodian leases its office space
from an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have occurred
to date include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand, One Post Office Square, Boston,
Massachusetts, serves as the fund's independent accountant. The auditor
examines financial statements for the fund and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended March 31, 1994 are included in the fund's Annual
Report, which is a separate report supplied with this Statement of
Additional Information . The fund's financial statements and financial
highlights are incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
CA - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short - comings.
C - Bonds rated C are the lowest - rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S C ORPORATE BOND
RATINGS :
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating
will also be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The fund's financial statements and financial highlights are filed
herein as Exhibit 24(a).
(b) Exhibits
1. (a) Amended and Restated Declaration of Trust dated April 15, 1994 is
filed herein as Exhibit 1(a).
2. (a) By-laws of Registrant are incorporated herein by reference to
Exhibit 2 to Post-Effective Amendment No. 15.
(b) Supplement to Bylaws of Registrant, dated November 14, 1989, is
incorporated herein by reference to Exhibit 2(a) to Post-Effective
Amendment No. 29.
3. Not applicable.
4. Not applicable.
5. (a) Form of Management Contract between Fidelity Magellan Fund and
Fidelity Management & Research Company was filed as exhibit 5(d) to
Post-Effective Amendment No. 39.
(b) Form of Sub-Advisory Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Management & Research Company is
filed herein as Exhibit 5(b).
(c) Form of Sub-Advisory Agreement between Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research Company is
filed herein as Exhibit 5(c).
6. (a) General Distribution Agreement between Fidelity Magellan Fund and
Fidelity Distributors Corporation as amended in its entirety, dated April
1, 1987, is incorporated by reference to Exhibit 6(a) to Post-Effective
Amendment No. 23.
(b) Amendment to Distribution Agreement between Fidelity Magellan Fund
and Fidelity Distributors Corporation, dated January 1, 1988, is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 26.
7. Retirement Plan for Non-Interested Trustees, Directors or General
Partners, effective November 1, 1989, is incorporated herein by reference
to Exhibit 7 to Post-Effective Amendment No. 34.
8. (a) Custodian Agreement, dated July 18, 1991, between Registrant and
Brown Brothers Harriman & Co. is incorporated herein by reference to
Exhibit 8(a) to Post-Effective Amendment No. 34.
(b) Appendix B, dated December 12, 1991, to the Custodian Agreement
between Registrant and Brown Brothers Harriman & Co. is incorporated
herein by reference to Exhibit 8(b) to Post-Effective Amendment No. 34.
9. (a) Amended Service Agreement between FMR Corp., Fidelity Service Co.,
and Registrant, dated June 1, 1989, is incorporated herein by reference to
Exhibit 9(a) to Post-Effective Amendment No. 30.
(b) Schedule A (transfer agent, dividend and distribution dispursing
agent, and shareholder servicing agent) to the Amended Agreement, with
respect to Fidelity Magellan Fund, dated June 1, 1989, is incorporated
herein by reference to Exhibit 9(b) to Post-Effective Amendment No. 30.
(c) Schedule B (agent to perform portfolio pricing and bookkeeping) to
the Amended Agreement, with respect to Fidelity Magellan Fund, dated June
1, 1989, is incorporated herein by reference to Exhibit 9(c) to
Post-Effective Amendment No. 30.
(d) Schedule C (agent for securities lending transactions) to the Amended
Agreement, with respect to Fidelity Magellan Fund, dated June 1, 1989, is
incorporated herein by reference to Post-Effective Amendment No. 30.
10. Not applicable.
11. Consent of Coopers and Lybrand is filed herein as Exhibit 11.
12. Not applicable.
13. Not applicable.
14. (a) Individual Retirement Account Custodial Agreement, and Disclosure
Statement, as currently in effect, are incorporated herein by reference to
Exhibit 14(a) to Post-Effective Amendment No. 31.
(b) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, are incorporated herein by reference to Exhibit 14(b)
to Post-Effective Amendment No. 31.
(c) Defined Benefit Pension Plan and Trust, as currently in effect, are
incorporated herein by reference to Exhibit 14(c) to Post-Effective
Amendment No. 31.
(d) Fidelity Investments Custodial Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) to Post-Effective
Amendment No. 34.
(e) Group IRA, the Custodial Agreement and Disclosure Statement, as
currently in effect, are incorporated herein by reference to Exhibit 14(e)
to Post-Effective Amendment No. 31.
(f) Fidelity Master Plan for Savings and Investments, as currently in
effect, is incorporated herein by reference to Exhibit 14(f) to
Post-Effective Amendment No. 34.
(g) Fidelity Investment 401(a) Prototype Plan for Tax-Exempt Employers,
Basic Plan Document No. 3, as currently in effect, are incorporated herein
by reference to Exhibit 14(g) to Post-Effective Amendment No. 31.
(h) 403(b)(7) Custodial Account Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) to Post-Effective
Amendment No. 31.
15. Not applicable.
16. (a) A schedule for computation of performance quotations is
incorporated by reference to Exhibit 16 to Post-Effective Amendment No. 24.
(b) A schedule for computation of performance calculations on behalf of
Fidelity Magellan Fund was filed as Exhibit 16(b) to Post-Effective
Amendment No. 37.
(c) Backup for the computation of a moving average is filed
herein as Exhibit 16 (c).
Item 25. Persons Controlled by or Under Common Control With Registrant
The Board of Directors of Registrant is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these
funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities
April 30, 1994
Title of Class Number of Record Holders
Shares of Beneficial Interest 2,825,995
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee, or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.;
President and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management &
Research (Far East) Inc.; President and Trustee of funds advised
by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director
of Worldwide Research of FMR.
Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management
& Research (Far East) Inc.; Treasurer of FMR Texas Inc.,
Senior Vice President and Chief Financial Officer of the Fidelity
funds.
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management &
Research (Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management
& Research (U.K.) Inc.; Senior Vice President and
Trustee of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research
(U.K.) Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
FMR Texas Inc.; Senior Vice President and Chief
Financial Officer of the Fidelity funds.
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management
& Research (U.K.) Inc.; Secretary of FMR Texas
Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the fund's
custodian Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
The Registrant on behalf of Magellan Fund undertakes, provided the
information required by Item 5A is contained in the annual report, to
furnish each person to whom a prospectus has been delivered, upon their
request and without charge, a copy of the Registrant's latest annual report
to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 40 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston and Commonwealth of Massachusetts, on the 13th day of
May 1994.
FIDELITY MAGELLAN FUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee May 13 , 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer May 13 , 1994
Gary L. French
/s/J. Gary Burkhead Trustee May 13 , 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee May 13 , 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee May 13 , 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee May 13 , 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee May 13 , 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee May 13 , 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee May 13 , 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee May 13 , 1994
Edward H. Malone
/s/Marvin L. Mann_____* Trustee May 13 , 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee May 13 , 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee May 13 , 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Stephanie Xupolos pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Special Situations Fund
Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P.
Fidelity Advisor Series VI Fidelity Trend Fund
Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities
Fidelity Contrafund Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Spartan U.S. Treasury Money Market
Fidelity Fixed-Income Trust Fund
Fidelity Government Securities Fund Variable Insurance Products Fund
Fidelity Hastings Street Trust Variable Insurance Products Fund II
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Marvin L. Mann October 20, 1993
Marvin L. Mann
Exhibit 24(a)
(2_FIDELITY_LOGOS)FIDELITY
MAGELLAN(Registered trademark)
FUND
ANNUAL REPORT
MARCH 31, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 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.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 46 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 50 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 59 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.
INVESTMENTS MARCH 31, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 89.1%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.1%
Precision Castparts Corp. 162,700 $ 5,471 74018910
Rockwell International Corp. 157,100 6,245 77434710
Sturm Ruger & Co., Inc. 105,300 3,133 86415910
Sundstrand Corp. 122,700 5,537 86732310
20,386
BASIC INDUSTRIES - 3.7%
CHEMICALS & PLASTICS - 1.0%
Albemarle Corp. (a) 689,900 10,176 01265310
Atlantis Group, Inc. (Trivest/Winston)(a)(g) 77,269 744 04914794
Cabot Corp. (f) 1,336,100 72,149 12705510
Eastman Chemical Co. 175,650 7,070 27743210
Engelhard Corp. 1,360,800 37,762 29284510
Fuller (H.B.)Co. 10,000 358 35969410
Hanna (M.A.)Co. 72,700 2,626 41052210
Lubrizol Corp. 1,655,800 57,125 54927110
Monsanto Co. 213,300 16,584 61166210
Morton International, Inc. 737,900 73,698 61933110
Myers Industries, Inc. 54,900 1,119 62846410
Olin Corp. 17,600 836 68066520
PPG Industries, Inc. 364,800 27,132 69350610
Praxair, Inc. 4,400 76 74005P10
Shin-Etsu Chemical Co. Ltd. 735,000 13,748 82499210
321,203
IRON & STEEL - 1.4%
AK Steel Holdings Corp. 1,000,000 23,500 00154710
Allegheny Ludlum Industries, Inc. 1,237,000 22,884 01690010
Bethlehem Steel Corp. (a) 2,973,600 59,472 08750910
Birmingham Steel Corp. 607,400 17,311 09125010
Carpenter Technology Corp. 109,500 6,721 14428510
Cleveland Cliffs, Inc. 40,700 1,755 18589610
Commercial Metals Co. 409,666 9,730 20172310
Inland Steel Industries, Inc. (a) 1,280,100 38,563 45747210
LTV Corp. (a) 3,301,581 49,524 50192110
LTV Corp. (warrants)(a) 1,013,857 4,055 50192112
Lukens, Inc. 10,150 316 54986610
Mueller Industries, Inc. (a)(f) 878,900 28,235 62475610
Nippon Steel 1,878,000 5,891 65499110
Nucor Corp. 2,013,300 122,056 67034610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
Oregon Steel Mills, Inc. 855,800 $ 19,683 68607910
USX-U.S. Steel Group 1,346,400 49,985 90337T10
Wheeling Pittsburgh Corp. (a) 1,156,100 17,920 96314210
477,601
METALS & MINING - 0.6%
Alcan Aluminium Ltd. 1,924,400 42,594 01371610
Aluminum Co. of America 630,600 45,167 02224910
Cyprus Amax Minerals Co. 1,158,550 33,453 23280910
Inco Ltd. 1,727,900 42,964 45325840
Minorco SA ADR 920,400 18,638 60434020
Reynolds Metals Co. 226,000 10,368 76176310
193,184
PACKAGING & CONTAINERS - 0.0%
Owens-Illinois, Inc. (a) 736,000 8,188 69076840
PAPER & FOREST PRODUCTS - 0.7%
Crown Packaging Holdings Ltd. (warrants) (a)(h) 5,000 200 22844311
Georgia-Pacific Corp. 881,000 56,384 37329810
Longview Fibre Co. 685,100 12,332 54321310
Rayonier, Inc. (a) 320,800 8,982 75490710
Temple-Inland, Inc. 110,100 5,037 87986810
Weyerhaeuser Co. 2,746,000 118,765 96216610
Willamette Industries, Inc. 537,000 25,508 96913310
227,208
TOTAL BASIC INDUSTRIES 1,227,384
CONGLOMERATES - 1.7%
Allied-Signal, Inc. 1,464,800 53,648 01951210
Harris Corp. (f) 2,309,100 108,816 41387510
ITT Corp. 2,897,600 248,469 45067910
Lancaster Colony Corp. 8,200 355 51384710
Mark IV Industries, Inc. (f) 2,984,534 54,841 57038710
Standex International Corp. 561,600 15,795 85423110
Suncor, Inc. (a) 951,800 20,981 86722910
Textron, Inc. 265,200 14,321 88320310
Tyco Laboratories, Inc. 406,000 20,249 90212010
United Technologies Corp. 698,200 43,376 91301710
580,851
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 3.3%
BUILDING MATERIALS - 1.7%
Adience, Inc. (a) 251,837 $ 252 00690510
Armstrong World Industries, Inc. (f) 2,427,600 131,090 04247610
Carlisle Companies, Inc. 389,000 12,448 14233910
Lafarge Corp. 2,782,400 59,822 50586210
Medusa Corp. (f) 1,084,050 30,082 58507230
National Gypsum Co. (a)(f) 1,399,489 64,376 63631710
Premdor, Inc. (a)(f) 3,441,600 39,797 74046P10
Southdown, Inc. (a)(f) 897,700 23,116 84129710
Tecumseh Products Co. (f) 920,000 44,505 87889520
Texas Industries, Inc. (f) 776,500 29,216 88249110
USG Corp. (a)(f) 4,113,800 124,957 90329340
United Dominion Industries Ltd 797,000 15,552 90991410
575,213
CONSTRUCTION - 0.9%
Centex Corp. (f) 1,974,100 60,950 15231210
Clayton Homes, Inc. (a) 1,245,800 26,318 18419010
Kaufman & Broad Home Corp. 285,900 5,647 48616810
Lennar Corp. (f) 939,200 29,115 52605710
Morrison-Knudsen Corp. 1,281,600 34,763 61844710
Oakwood Homes Corp. (f) 1,609,400 33,596 67409810
Pulte Corp. (f) 2,740,700 79,480 74586710
Toll Brothers, Inc. (a)(f) 2,158,800 29,953 88947810
299,822
ENGINEERING - 0.7%
Fluor Corp. 2,633,700 131,685 34386110
Foster Wheeler Corp. (f) 2,305,400 92,216 35024410
Glenayre Technologies, Inc. 303,500 11,230 37789910
235,131
REAL ESTATE - 0.0%
Castle & Cooke Homes, Inc. (a) 346,300 4,545 14842610
Hovnanian Enterprises, Inc. (a) 57,500 618 44248720
5,163
TOTAL CONSTRUCTION & REAL ESTATE 1,115,329
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 7.6%
AUTOS, TIRES, & ACCESSORIES - 4.7%
Automotive Industries Holding, Inc. (a) 110,000 $ 3,300 05329E10
Breed Technologies, Inc. (a) 685,800 22,546 10670210
Bridgestone Corp. 1,617,000 23,629 10844110
Chrysler Corp. 1,911,300 98,671 17119610
Cooper Tire & Rubber Co. 1,462,200 37,286 21683110
Cummins Engine Co., Inc. 194,900 9,599 23102110
Dana Corp. 1,981,200 113,424 23581110
Danaher Corp. 632,900 23,496 23585110
Eaton Corp. 1,000,200 57,887 27805810
Echlin, Inc. (f) 4,468,500 131,821 27874910
Federal-Mogul Corp. 386,400 11,399 31354910
Ford Motor Co. 1,979,300 116,284 34537010
General Motors Corp. 3,383,100 182,687 37044210
Goodyear Tire & Rubber Co. 6,573,800 266,239 38255010
Hayes Wheels International, Inc. 354,400 9,657 42080410
Honda Motor Co. Ltd. 989,000 15,897 43812810
Johnson Controls, Inc. 623,700 34,304 47836610
Magna International, Inc. 1,456,700 68,432 55922240
Mascotech, Inc. 1,194,400 24,485 57467010
Mitsubishi Motors Corp. 918,000 7,682 60899692
Modine Manufacturing Co. 568,500 14,639 60782810
NACCO Industries, Inc. (f) 472,646 23,869 62957910
Nissan Motor Co. Ltd. Ord. 2,034,000 16,248 65474491
Pep Boys-Manny, Moe & Jack 296,300 8,370 71327810
Smith (A.O.)Corp. (f) 1,154,300 37,226 83186520
Snap-on Tools Corp. 340,000 13,600 83303410
Standard Products Co. 652,850 21,299 85383610
Superior Industries International, Inc. 225,300 7,857 86816810
Suzuki Motor Corp. 1,152,000 14,028 86958592
TRW, Inc. 1,211,400 82,981 87264910
Toyota Motor Corporation 2,131,000 40,897 89399999
Walbro Corp. (f) 847,100 23,719 93115410
1,563,458
CONSUMER ELECTRONICS - 1.0%
Matsushita Electric Industrial Co. Ltd. 2,254,000 37,329 57687910
Maytag Co. 8,100 150 57859210
Sharp Corp. 1,746,000 28,065 81989991
Sony Corp. 728,000 41,489 83569999
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - CONTINUED
Sunbeam-Oster, Inc. 963,500 $ 17,825 86707110
Toro Co. 265,500 6,969 89109210
Whirlpool Corp. 3,218,000 195,494 96332010
327,321
HOME FURNISHINGS - 0.5%
Ethan Allen Interiors, Inc. (a) 236,500 6,149 29760210
HON Industries, Inc. 379,800 12,628 43809210
Heilig-Meyers Co. 446,500 13,842 42289310
Interco, Inc. (a) 956,900 13,516 45850710
La-Z Boy Chair Co. (f) 962,800 32,374 50533610
Leggett & Platt, Inc. 1,396,800 61,110 52466010
Levitz Furniture, Inc. (a) 380,300 5,847 52748210
Miller (Herman), Inc. 525,500 14,451 60054410
159,917
TEXTILES & APPAREL - 1.4%
Burlington Industries, Inc. 472,400 7,145 12169310
Fruit of the Loom, Inc. (a) 1,992,900 60,285 35941610
Haggar Corp. 378,000 13,136 40517310
Jones Apparel Group, Inc. (a)(f) 1,295,300 40,964 48007410
Kellwood Co. 866,800 20,912 48804410
Liz Claiborne, Inc. 2,073,700 48,991 53932010
Nine West Group, Inc. (a)(f) 2,886,600 86,237 65440D10
Oxford Industries, Inc. 125,300 3,853 69149730
Phillips-Van Heusen Corp. 618,500 21,570 71859210
Russell Corp. 135,800 3,853 78235210
Shaw Industries, Inc. 1,951,700 39,766 82028610
Springs Industries, Inc. (f) 586,100 20,220 85178310
Stride Rite Corp. 1,192,200 17,585 86331410
Tommy Hilfiger (a)(f) 1,279,400 45,898 89299B92
VF Corp. 93,900 4,695 91820410
Westpoint Stevens, Inc. (a) 1,286,100 21,221 96123810
456,331
TOTAL DURABLES 2,507,027
ENERGY - 9.2%
COAL - 0.1%
MAPCO, Inc. 646,300 38,536 56509710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - 1.6%
Baker-Hughes, Inc. 3,649,600 $ 64,780 05722410
Dresser Industries, Inc. 1,990,540 42,299 26159710
Energy Service, Inc. (a)(f) 17,784,700 64,470 29271910
Global Marine, Inc. (a) 5,811,600 22,520 37935240
Halliburton Co. 1,034,700 30,136 40621610
Helmerich & Payne, Inc. 542,500 14,105 42345210
Nabors Industries, Inc. (a)(f) 4,934,000 32,688 62956810
Noble Drilling Corp. (a)(f) 4,172,200 28,162 65504210
Oceaneering International, Inc. (a) 54,700 670 67523210
Parker Drilling Co. (a)(f) 5,499,200 29,558 70108110
Reading & Bates Corp. (a)(f) 5,553,293 31,237 75528180
Rowan Companies, Inc. (a) 3,830,600 26,814 77938210
Schlumberger Ltd. 697,600 36,886 80685710
Sonat Offshore Drilling, Inc. 796,000 13,433 83542010
Tidewater, Inc. (f) 4,214,300 82,179 88642310
Weatherford International, Inc. (a) 1,984,900 16,624 94707610
536,561
OIL & GAS - 7.5%
Amerada Hess Corp. 1,111,400 49,735 02355110
Anadarko Petroleum Corp. (f) 3,092,400 142,250 03251110
Anderson Exploration Ltd. (a)(f) 1,574,500 38,974 03390110
Apache Corp. (f) 4,772,300 110,359 03741110
Ashland Oil, Inc. 285,500 11,634 04454010
British Petroleum PLC:
ADR 3,084,200 189,293 11088940
Ord. 15,090,871 78,356 11088910
Burlington Resources, Inc. (f) 9,106,200 387,013 12201410
Canada Occidental Petroleum Ltd. 1,557,500 30,815 13642010
Canadian Natural Resources Ltd. (a)(f) 3,714,700 51,009 13638510
Chauvco Resources Ltd. (a) 1,830,700 25,635 16260010
Devon Energy Corp. (f) 1,592,100 28,260 25179910
Diamond Shamrock R&M, Inc. (f) 1,627,400 44,754 25274710
Enron Oil & Gas Co. 1,406,600 60,132 29356210
Horsham Corp. 1,871,900 26,043 44090710
Kelley Oil & Gas Partners, Ltd. 858,700 7,836 48773610
Kerr-McGee Corp. 1,579,300 65,541 49238610
Louisiana Land & Exploration Co. 669,200 24,175 54626810
Mesa, Inc. (a)(f) 2,215,134 12,737 59091110
Mitchell Energy & Development Corp. (f) 1,263,800 22,590 60659220
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Murphy Oil Corp. 1,320,400 $ 52,816 62671710
Newfield Exploration Co. (a) 220,500 4,686 65129010
Noble Affiliates, Inc. (f) 3,346,800 79,486 65489410
Northstar Energy Corp. (a)(f) 1,288,600 24,214 66703R10
Nuevo Energy Corporation (a) 438,600 8,443 67050910
Pancanadian Petroleum Ltd. 602,500 17,527 69890020
Parker & Parsley Petroleum Co. (f) 2,655,300 56,757 70101810
Petro-Canada 2,689,500 26,484 71644E10
Phillips Petroleum Co. 1,007,000 26,811 71850710
Poco Petroleums Ltd. 3,656,200 25,764 73036110
Pogo Producing Co. (a)(f) 3,210,800 52,978 73044810
Renaissance Energy Ltd. (a)(f) 7,786,000 156,153 75966610
San Juan Basin Royalty Trust (UBI)(f) 3,566,900 29,427 79824110
Snyder Oil Corp. (f) 2,302,400 44,897 83348210
Sun Company, Inc. 434,800 14,077 86676210
Talisman Energy Inc. (a) 398,600 8,534 87425E10
Tarragon Oil & Gas Ltd. (a) 231,900 2,640 87629E20
Tosco Corp. (f) 2,590,000 77,700 89149030
Triton Energy Corp. (a) 1,610,400 44,085 89675010
Ultramar Corporation 741,900 19,289 90391210
Unocal Corp. 11,278,100 284,772 91528910
Vintage Petroleum, Inc. (f) 1,255,200 23,535 92746010
2,488,216
TOTAL ENERGY 3,063,313
FINANCE - 6.1%
BANKS - 0.3%
Advanta Corp. 398,700 12,559 00794210
Bank of New York Co., Inc. 439,700 22,425 06405710
Citicorp (a) 301,587 11,310 17303410
Fleet Financial Group, Inc. 400,000 14,050 33891510
Republic New York Corp. 257,400 12,387 76071910
Signet Banking Corp. 599,900 23,696 82668110
96,427
CREDIT & OTHER FINANCE - 0.6%
Dean Witter Discover & Co. 1,874,228 61,147 24240V10
First USA, Inc. 1,520,400 53,594 33743H10
Household International, Inc. 1,252,940 37,118 44181510
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Mercury Finance Co. 287,900 $ 4,822 58939510
MBNA Corp. 1,017,200 21,488 55262L10
Non-Perform Mortgage Loan Trust (a) 218,530 15,516 65599D22
193,685
FEDERAL SPONSORED CREDIT - 1.6%
Federal Home Loan Mortgage Corporation 3,754,500 190,541 31340030
Federal National Mortgage Association 4,167,900 324,054 31358610
514,595
INSURANCE - 2.2%
AFLAC, Inc. 145,300 4,468 00105510
Aetna Life & Casualty Co. 810,500 43,058 00814010
Allmerica Property & Casualty Companies 2,127,400 38,293 01975T10
Allstate Corp. 1,229,200 29,501 02000210
American International Group, Inc. 1,654,100 139,151 02687410
CIGNA Corp. 538,700 31,985 12550910
Chubb Corp. (The) 188,100 13,755 17123210
Equitable Iowa Companies 158,600 5,353 29451030
Frontier Insurance Group, Inc. 87,500 3,806 35908110
General Re Corp. 1,015,500 109,039 37056310
HealthCare COMPARE Corp. (a) 604,500 12,166 42192810
Jefferson Pilot Corp. 92,700 4,368 47507010
Lincoln National Corp. 996,100 40,591 53418710
MBIA, Inc. 199,300 10,887 55262C10
Mercury General Corp. 75,400 2,036 58940010
Mutual Risk Management Ltd. 383,800 9,451 62835110
Progressive Corp. (Ohio) 1,097,600 31,968 74331510
SAFECO Corp. 988,200 52,251 78642910
St. Paul Companies, Inc. (The) 268,500 20,876 79286010
SunAmerica, Inc. 272,100 9,524 86693010
Tokio Marine & Fire Insurance Co. Ltd. (The) 550,000 6,590 88909099
Travelers, Inc. (The) 1,442,864 50,681 89419010
UNUM Corp. 128,500 6,778 90319210
USF&G Corp. 1,716,900 22,534 90329010
USLIFE Corp. 807,200 31,178 91731810
Zenith National Insurance Corp. 355,800 7,427 98939010
737,715
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SAVINGS & LOANS - 0.2%
Coast Savings Financial, Inc. (a)(f) 978,600 $ 13,578 19039M10
FirstFed Michigan Corp. (f) 1,165,050 26,214 33761R10
GP Financial Corp. (a) 1,570,500 29,054 36193510
Standard Federal Bank 420,500 11,774 85338910
80,620
SECURITIES INDUSTRY - 1.2%
Alex. Brown, Inc. 593,400 14,316 01390210
Bear Stearns Companies, Inc. 720,965 14,059 07390210
Daiwa Securities 894,000 14,283 23499010
Edwards (A.G.), Inc. 829,300 14,824 28176010
Franklin Resources, Inc. 2,313,600 93,990 35461310
Merrill Lynch & Co., Inc. 1,774,400 66,096 59018810
Morgan Stanley Group, Inc. 264,600 16,934 61744610
Nikko Securities 1,851,000 22,360 65399010
Nomura Securities Co. Ltd. 2,015,000 42,204 65536130
PaineWebber Group, Inc. 2,539,300 42,851 69562910
Price (T. Rowe)Associates, Inc. 745,600 20,877 74147710
Schwab (Charles)Corp. 105,700 2,841 80851310
Yamaichi Securities 2,662,000 22,017 98499210
387,652
TOTAL FINANCE 2,010,694
HEALTH - 3.2%
DRUGS & PHARMACEUTICALS - 0.0%
Biocraft Laboratories, Inc. 244,000 3,721 09058710
Nature's Bounty, Inc. (a) 469,000 9,849 63901730
13,570
MEDICAL EQUIPMENT & SUPPLIES - 1.0%
Cardinal Health, Inc. 727,700 33,474 14149Y10
Cordis Corp. (a)(f) 1,467,300 61,627 21852510
McKesson Corp. (f) 3,704,535 220,420 58155610
Owens & Minor, Inc. 191,100 4,348 69073010
Sofamor/Danek Group, Inc. (a) 200 4 83400510
319,873
MEDICAL FACILITIES MANAGEMENT - 2.2%
Caremark International, Inc. 886,200 16,505 14170410
Columbia/HCA Healthcare Corp. (f) 9,879,997 397,670 19767710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Humana, Inc. 4,312,000 $ 80,311 44485910
Medical Care America, Inc. (a) 822,800 17,485 58450C10
National Medical Enterprises, Inc. 1,695,700 27,343 63688610
Surgical Care Affiliates, Inc. 211,500 3,331 86881810
U.S. Healthcare, Inc. 3,493,550 143,236 91191010
United HealthCare Corp. 1,208,600 51,668 91058110
Universal Health Services, Inc (a) 247,100 5,807 91390310
743,356
TOTAL HEALTH 1,076,799
INDUSTRIAL MACHINERY & EQUIPMENT - 5.0%
ELECTRICAL EQUIPMENT - 1.7%
American Power Conversion Corp. (a) 1,731,500 44,370 02906610
Amphenol Corp. (a)(f) 3,142,300 45,563 03209420
Antec Corp. (a) 500,000 9,937 03664P10
Asea AB Free shares
Series B 24,900 1,867 04365510
Series A 97,200 7,275 04365590
Corning, Inc. 1,027,000 33,249 21935010
Duracell International, Inc. 717,600 28,525 26633L10
General Electric Co. 498,000 49,613 36960410
General Signal Corp. 1,081,400 35,686 37083810
Grainger (W.W.), Inc. 185,400 11,773 38480210
Itel Corp. (a)(f) 2,989,600 74,740 46564210
Murata Manufacturing Co. Ord. 50,000 2,362 62699110
Oak Industries, Inc. (a)(f) 1,309,000 23,071 67140050
Philips Electronics (a) 2,581,000 70,191 71833799
Philips NV (a) 2,964,000 80,028 71833750
Scientific-Atlanta, Inc. 1,677,950 46,144 80865510
Vicor Corporation (a) 534,900 13,907 92581510
578,301
INDUSTRIAL MACHINERY & EQUIPMENT - 3.1%
Briggs & Stratton Corp. (f) 869,200 73,013 10904310
Caterpillar, Inc. 3,773,600 424,058 14912310
Clark Equipment Co. (a) 784,400 46,476 18139610
Deere & Co. 1,789,900 150,352 24419910
Duriron Company, Inc. 336,150 5,799 26684910
Greenfield Industries, Inc. 280,000 5,880 39505810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
IDEX Corp. (a) 466,300 $ 16,262 45167R10
Indresco, Inc. (a)(f) 2,096,800 28,307 45590510
Kennametal, Inc. 453,365 24,312 48917010
Mitsubishi Heavy Industry 824,000 5,226 60699310
Singer Company 230,700 7,930 82930F10
Stewart & Stevenson Services, Inc. 303,100 13,488 86034210
TRINOVA Corp. (f) 1,589,200 55,026 89667810
Tenneco, Inc. 561,100 29,598 88037010
Thermadyne Holdings Corp. 3,687 48 88343510
Varity Corp. (a)(f) 3,498,700 146,508 92224R60
1,032,283
POLLUTION CONTROL - 0.2%
Attwoods PLC:
ADR 477,200 4,176 04987020
Ord. 2,669,000 4,751 04987010
Ogden Corp. 992,500 22,083 67634610
Sanifill, Inc. (a)(f) 790,800 17,002 80101810
48,012
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,658,596
MEDIA & LEISURE - 2.6%
BROADCASTING - 0.3%
CBS, Inc. 58,200 17,809 12484510
Capital Cities/ABC, Inc. 22,900 15,664 13985910
Great American Communication 340,489 5,363 38991210
Home Shopping Network, Inc. (a) 531,325 6,841 43735110
New World Communications Group 1,258,770 12,430 64927A20
Tokyo Broadcasting System 100,000 1,685 88739310
Viacom, Inc. (non-vtg.)(a) 1,035,600 27,443 92552430
87,235
ENTERTAINMENT - 0.3%
Carnival Cruise Lines, Inc. 492,900 21,872 14365810
Casino America, Inc. (a) 130,700 4,378 14757510
Cedar Fair LP (f) 1,100,900 37,018 15018510
GC Cos., Inc. (a) 71,090 2,417 36155Q10
Royal Carribean Cruises Ltd. 867,600 21,582 78015392
Spelling Entertainment Group, Inc. 1,413,400 14,487 84780710
101,754
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 1.0%
ARCTCO, Inc. 566,550 $ 14,022 03966510
Brunswick Corp. (f) 7,610,700 160,776 11704310
Fleetwood Enterprises, Inc. (f) 4,565,800 93,028 33909910
Mattel, Inc. 2,121,300 53,298 57708110
321,124
LODGING & GAMING - 0.5%
Bally Gaming International, Inc. 115,673 1,807 05873110
Bally Gaming International, Inc. (warrants)(a)(g) 225,000 1,294 05873194
Bally's Grand, Inc. (a) 326,944 3,841 05873J10
Bally's Grand, Inc. (warrants)(a) 61,691 262 05873J11
Boyd Gaming Corp. (a) 136,800 2,052 10330410
Caesars World, Inc. (a) 897,104 40,145 12769510
Hospitality Franchise Systems, Inc. (a) 646,700 35,569 44091210
International Game Technology Corp. 509,300 13,815 45990210
Mirage Resorts, Inc. (a) 462,700 9,717 60462E10
Promus Companies, Inc. (a) 677,300 26,669 74342A10
Showboat, Inc. (f) 1,492,150 25,553 82539010
WMS Industries, Inc. (a) 441,900 11,876 92929710
172,600
PUBLISHING - 0.4%
American Greetings Corp. 312,300 8,237 02637510
Banta Corp. 876,750 29,590 06682110
Central Newspapers, Inc. 435,200 11,696 15464710
Gannett Co., Inc. 212,400 11,178 36473010
Harcourt Gen. Inc. 320,100 10,603 41163G10
Lee Enterprises, Inc. 357,800 12,568 52376810
Media General, Inc. 112,100 2,494 58440410
New York Times Co. (The) 1,617,100 44,268 65011110
Times Mirror Co., Series A 400,900 12,478 88736010
143,112
RESTAURANTS - 0.1%
Buffets, Inc. (a) 704,800 15,329 11988210
McDonald's Corp. 114,500 6,512 58013510
21,841
TOTAL MEDIA & LEISURE 847,666
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 1.1%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 1,132,900 $ 37,102 72368610
BEVERAGES - 0.1%
Coca-Cola Enterprises, Inc. 26,500 460 19121910
Heileman G Brewing, Inc. unit, (g) 340 6,800 42288492
Snapple Beverage Corp. (a) 1,160,700 26,986 83303710
34,246
FOODS - 0.2%
Chiquita Brands International, Inc. (f) 2,571,800 43,399 17003210
Dean Foods Co. 32,400 895 24236110
Dole Food, Inc. 355,400 11,195 25660510
55,489
HOUSEHOLD PRODUCTS - 0.7%
Avon Products, Inc. 1,654,500 93,479 05430310
Paragon Trade Brands, Inc. (a) 538,600 15,821 69912K10
Premark International, Inc. (f) 1,790,300 128,902 74045910
238,202
TOTAL NONDURABLES 365,039
PRECIOUS METALS - 0.4%
American Barrick Resources Corp. 894,100 22,536 02451E10
Battle Mountain Gold Co. 754,900 9,059 07159310
Echo Bay Mines Ltd. 525,000 6,972 27875110
Homestake Mining Co. 1,627,500 36,619 43761410
Newmont Mining Corp. 324,400 18,612 65163910
Pegasus Gold, Inc. 1,168,900 23,232 70556K10
Placer Dome, Inc. 296,200 7,332 72590610
124,362
RETAIL & WHOLESALE - 6.9%
APPAREL STORES - 1.3%
AnnTaylor Stores Corp. (a) 94,000 3,008 03611510
Baker (J.), Inc. 209,500 4,190 05723210
Brown Group, Inc. (f) 1,059,100 38,790 11565710
Burlington Coat Factory Warehouse Corp. (a)(f) 2,624,625 66,272 12157910
Charming Shoppes, Inc. 283,300 3,435 16113310
Claire's Stores, Inc. (f) 1,502,100 28,352 17958410
Clothestime, Inc. (The)(a) 556,600 4,105 18909510
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Dress Barn, Inc. (a)(f) 1,886,800 $ 22,642 26157010
Gap, Inc. 2,094,400 92,939 36476010
Gymboree Corp. (a) 284,500 12,518 40377710
Lamonts Apparel, Inc. (a) 143,486 215 51362820
Limited, Inc. (The) 2,575,800 53,770 53271610
Ross Stores, Inc. (a) 1,023,000 15,601 77829610
TJX Companies, Inc. 2,338,100 61,667 87254010
Talbots, Inc. 282,600 8,195 87416110
United States Shoe Corp. 1,520,200 25,843 91260510
441,542
DRUG STORES - 0.2%
Big B, Inc. 70,000 761 08889110
General Nutrition Companies, Inc. (a) 1,105,500 27,361 37047F10
Revco (D.S.), Inc. (a)(f) 3,185,294 52,159 76133910
80,281
GENERAL MERCHANDISE STORES - 2.4%
Carson Pirie Scott & Co. 919,800 14,487 14590310
Carter Hawley Hale Stores, Inc. (a) 501,100 6,264 14622730
Consolidated Stores Corp. (a)(f) 3,531,900 60,925 21014910
Federated Department Stores, Inc. (a) 3,442,231 75,729 31410J10
Hills Stores 129,293 2,537 43165992
Hudson Bay Co. Ord. (f) 3,169,300 67,571 44420410
Mac Frugals Bargains Close Outs, Inc. (a) 847,600 14,091 55415210
May Department Stores Co. (The) 1,757,200 73,143 57777810
Mercantile Stores Co., Inc. 221,600 8,476 58753310
Michaels Stores, Inc. (a) 207,100 8,491 59408710
Nordstrom, Inc. 1,085,300 43,141 65566410
Penney (J.C.)Co., Inc. 3,689,100 195,061 70816010
Price/Costco, Inc. 1,302,800 23,613 74143W10
Sears, Roebuck & Co. 4,878,300 209,767 81238710
803,296
GROCERY STORES - 0.8%
American Stores Co. 764,100 39,160 03009610
Food 4 Less Holdings, Inc. (warrants)(a) 1,169 35 34475311
Grand Union Capital Corp. (a) 6,979 4,676 40099B92
Grand Union Co. (warrants) 1,749 1,172 38653295
Hannaford Brothers Co. 458,000 10,763 41055010
Kroger Co. (The)(a) 2,746,100 65,563 50104410
Safeway, Inc. (a) 2,230,600 53,256 78651420
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - CONTINUED
Starbucks Corp. (a) 419,500 $ 10,225 85524410
Stop & Shop Companies, Inc. (a) 1,491,100 36,346 86209910
Supervalu, Inc. 429,600 14,875 86853610
Winn-Dixie Stores, Inc. 210,800 11,568 97428010
247,639
RETAIL & WHOLESALE, MISCELLANEOUS - 2.2%
Best Buy Co., Inc. (a)(f) 1,461,000 93,321 08651610
CML Group, Inc. 2,372,900 39,449 12582010
Circuit City Stores, Inc. 2,292,700 45,567 17273710
Diagnostek, Inc. 179,700 3,145 25290010
Fingerhut Companies, Inc. 844,300 24,696 31786710
Gateway 2000, Inc. (a) 275,000 5,603 36783310
Hanover Direct, Inc. (a) 3,275,600 20,882 41078310
Lowe's Companies, Inc. (f) 9,272,000 299,022 54866110
Micro Warehouse, Inc. (a) 331,300 15,240 59501B10
Musicland Stores Corp. (a) 1,212,900 23,652 62758B10
Office Depot, Inc. (a) 313,200 10,923 67622010
Payless Cashways, Inc. (a)(f) 2,957,300 48,426 70437830
Sotheby's Holdings, Inc. 950,600 16,160 83589810
Spiegel, Inc. (f) 934,700 21,264 84845710
Staples, Inc. 265,400 6,668 85503010
Sun Television & Appliances, Inc 497,000 5,219 86688110
Waban, Inc. (a)(f) 2,926,300 53,771 92939410
733,008
TOTAL RETAIL & WHOLESALE 2,305,766
SERVICES - 1.9%
ADVERTISING - 0.5%
Foote Cone & Belding Communications, Inc. (f) 854,900 35,906
34487210
Omnicom Group, Inc. (f) 2,925,600 139,697 68191910
175,603
LEASING & RENTAL - 0.3%
GATX Corp. 616,700 25,901 36144810
Interpool, Inc. (a) 736,900 13,080 46062R10
PHH Corp. 175,000 6,213 69332010
Ryder Systems, Inc. 1,772,100 43,859 78354910
89,053
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
PRINTING - 0.4%
Bowne & Co., Inc. 741,600 $ 16,686 10304310
Donnelley (R.R.)& Sons Co. 910,400 25,605 25786710
New England Business Service, Inc. 439,100 8,343 64387210
Reynolds & Reynolds Co. 1,716,900 37,343 76169510
Valassis Communications, Inc. 1,157,300 20,253 91886610
Wallace Computer Services, Inc. (f) 1,189,300 39,544 93227010
147,774
SERVICES - 0.7%
Manpower, Inc. (a) 1,470,600 27,941 56418H10
Olsten Corp. 155,000 4,979 68138510
Pittston Company Services Group (f) 4,339,100 96,545 72570110
Robert Half International, Inc. 643,900 19,719 77032310
Service Corp. International 2,930,300 73,990 81756510
223,174
TOTAL SERVICES 635,604
TECHNOLOGY - 23.6%
COMMUNICATIONS EQUIPMENT - 2.3%
Cabletron Systems, Inc. (a) 617,600 67,473 12692010
Cisco Systems, Inc. (a) 4,443,600 152,193 17275R10
DSC Communications Corp. (a) 2,383,400 119,766 23331110
Ericsson (L.M.)Telephone Co.:
Class B 169,300 7,287 29482120
Class B ADR 129,000 5,434 29482140
General Instrument Corp. (a) 2,047,000 97,233 37012110
Network General Corp. (a)(f) 1,080,900 19,321 64121010
Newbridge Networks Corp. (a) 245,800 13,427 65090110
Nokia AB Free shares 367,900 26,670 65599992
Tellabs, Inc. (a)(f) 1,548,500 84,780 87966410
U.S. Robotics, Inc. (a)(f) 954,700 31,744 91246610
Wellfleet Communications, Inc. (a) 944,300 66,573 94949710
3Com Corp. (a) 1,082,500 60,485 88553510
752,386
COMPUTER SERVICES & SOFTWARE - 2.7%
Adobe Systems, Inc. 680,000 16,490 00724F10
Autodesk, Inc. 418,400 24,267 05276910
CUC International, Inc. (a) 1,406,600 44,308 12654510
Cheyenne Software, Inc. (a) 566,850 14,596 16688810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT - CONTINUED
Chipcom Corp. (a)(f) 585,960 $ 30,030 16961710
Compuware Corp. (a) 1,041,500 43,873 20563810
ECI Telecom Ltd. 1,717,100 39,493 26825810
Electronics for Imaging Incorporated (a) 356,100 5,252 28608210
Equifax Inc. 2,120,000 50,350 29442910
Informix Corp. (a) 100,400 2,083 45677910
Intelligent Electronics, Inc. (f) 2,855,200 71,380 45815710
LEGENT Corp. (a) 821,100 20,938 52465R10
Lotus Development Corp. (a)(f) 4,230,400 298,243 54570010
Oracle Systems Corp. (a) 2,708,300 87,004 68389X10
Recognition Equipment, Inc. (a)(f) 1,465,900 17,591 75623110
SafeCard Services, Inc. (f) 2,166,900 38,462 78642110
Shared Medical Systems Corp. 577,500 15,087 81948610
Sterling Software, Inc. (a)(f) 990,777 28,609 85954710
SunGard Data Systems, Inc. (a) 512,400 18,254 86736310
Sybase, Inc. (a) 811,700 36,527 87113010
902,837
COMPUTERS & OFFICE EQUIPMENT - 6.7%
ADAPTEC, Inc. (a)(f) 5,174,600 93,790 00651F10
AST Research, Inc. (a)(f) 1,978,100 42,035 00190710
Amdahl Corp. (f) 9,616,800 62,509 02390510
Apple Computer, Inc. 1,862,500 61,928 03783310
Canon, Inc. 2,371,000 37,419 13780199
Casio Computer Co. Ltd. Ord. 1,803,000 22,307 14761893
Comdisco, Inc. 1,484,900 28,770 20033610
Compaq Computer Corp. (a) 2,934,000 286,799 20449310
Conner Peripherals, Inc. (a)(f) 4,182,600 63,262 20810810
Creative Technologies, Corp. (a) 746,400 19,220 22599992
Dell Computer Corporation (a)(f) 2,737,100 69,112 24702510
Diebold, Inc. (f) 2,724,600 99,448 25365110
Digital Equipment Corp. (a) 1,311,500 38,689 25384910
EMC Corp. (a)(f) 11,413,900 226,851 26864810
Exabyte (a)(f) 1,497,200 28,634 30061510
Hewlett-Packard Co. 3,625,800 297,769 42823610
International Business Machines Corp. 6,209,700 338,429 45920010
Komag, Inc. (a)(f) 2,085,400 48,486 50045310
Madge NV (a) 50,000 713 55799522
Quantum Corp. (a)(f) 4,245,000 69,512 74790610
SCI Systems, Inc. (a) 966,100 15,458 78389010
Seagate Technology (a)(f) 4,883,700 113,546 81180410
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Silicon Graphics, Inc. (a) 835,900 $ 19,957 82705610
Symbol Technologies, Inc. (a) 268,500 5,169 87150810
Tandem Computers, Inc. (a) 4,330,300 61,165 87537010
Tech Data Corp. (a) 316,800 11,484 87823710
Wang Labs, Inc. Delaware 765,000 11,475 93369N10
Western Digital Corp. (a)(f) 2,949,100 49,766 95810210
2,223,702
ELECTRONIC INSTRUMENTS - 1.3%
Analogic Corp. (a)(f) 1,235,400 18,840 03265720
Applied Materials, Inc. (a) 3,117,200 138,715 03822210
KLA Instruments Corp. (a) 1,121,400 40,090 48248010
Lam Research Corp. (a) 770,200 23,876 51280710
Novellus System, Inc. (a) 885,200 30,761 67000810
Tektronix, Inc. (f) 1,657,800 50,563 87913110
Teradyne, Inc. (a) 1,812,400 45,763 88077010
Varian Associates, Inc. (f) 2,181,000 74,154 92220410
422,762
ELECTRONICS - 10.6%
Advanced Micro Devices, Inc. (a)(f) 8,193,800 252,983 00790310
Altera Corp. (a) 292,200 9,350 02144110
Analog Devices, Inc. (a) 2,154,700 56,022 03265410
Arrow Electronics, Inc. (a) 1,498,800 56,018 04273510
Atmel Corp. (a)(f) 1,685,400 71,208 04951310
Augat, Inc. (a)(f) 1,899,620 37,992 05104210
Avnet, Inc. (f) 2,824,245 107,674 05380710
Berg Electronics Holdings Corp. (a)(h) 218,280 349 08372610
Cirrus Logic, Inc. (a)(f) 1,498,800 49,460 17275510
Cypress Semiconductor Corp. (f) 3,628,500 58,056 23280610
Cyrix Corp. (a) 330,900 9,182 23281510
Dallas Semiconductor Corp. (a)(f) 1,317,700 22,236 23520410
Hitachi, Ltd. 4,398,000 39,845 43357810
Integrated Device Technology, Inc. (a)(f) 1,942,900 49,301 45811810
Intel Corp. 12,721,100 858,674 45814010
International Rectifier Corp. (a) 1,016,200 16,132 46025410
Kent Electronics Corp. (a)(f) 336,800 9,009 49055310
LSI Logic Corp. (a)(f) 4,953,100 99,062 50216110
Linear Technology Corp. 248,600 10,503 53567810
Marshall Industries (a)(f) 1,701,400 42,322 57239310
Maxim Integrated Products, Inc. (a) 516,700 25,964 57772K10
Micron Technology, Inc. 1,882,500 157,189 59511210
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Motorola, Inc. 7,098,600 $ 718,733 62007610
National Semiconductor Corp. (a)(f) 9,189,180 192,973 63764010
Pioneer-Standard Electronics, Inc. (f) 977,863 22,246 72387710
Rohm Co. Ltd. (a) 454,000 17,249 77536110
Storage Technology Corp. (a) 1,877,700 61,025 86211120
Texas Instruments, Inc. (f) 4,881,900 377,127 88250810
Toshiba Corp. (a) 955,000 6,857 89149310
VLSI Technology, Inc. (a)(f) 3,453,000 48,774 91827010
Wyle Laboratories (f) 1,214,200 22,918 98305110
Zilog, Inc. (a) 179,800 5,978 98952410
Aiwa Co. Ltd. 696,000 17,358 00959999
3,529,769
PHOTOGRAPHIC EQUIPMENT - 0.0%
Eastman Kodak Co. 138,300 6,137 27746110
Fuji Photo Film Co. Ltd. 412,000 9,191 35958610
15,328
TOTAL TECHNOLOGY 7,846,784
TRANSPORTATION - 6.1%
AIR TRANSPORTATION - 0.2%
KLM Royal Dutch Airlines (a) 893,400 22,223 48251610
KLM Royal Dutch Airlines Ord. (a) 1,376,800 34,951 48251620
SkyWest, Inc. 31,500 1,095 83087910
58,269
RAILROADS - 4.6%
Burlington Northern, Inc. 893,700 53,175 12189710
CSX Corp. (f) 5,346,900 438,446 12640810
Canadian Pacific Ltd. Ord. 7,751,000 121,840 13644030
Chicago & North Western Holdings Corp. (a) 1,040,200 25,225 16715510
Conrail, Inc. 4,041,300 233,385 20836810
Illinois Central Corp., Series A 1,624,276 54,819 45184110
Kansas City Southern Industries, Inc. (f) 2,736,400 138,530 48517010
Norfolk Southern Corp. 2,149,500 138,911 65584410
Santa Fe Pacific Corp. (f) 11,692,900 266,013 80218310
Trinity Industries, Inc. 302,800 11,506 89652210
Union Pacific Corp. 746,500 42,364 90781810
1,524,214
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
SHIPPING - 0.2%
American President Companies Ltd. (f) 1,620,900 $ 39,509 02910310
Kirby Corp. (a) 851,600 18,097 49726610
57,606
TRUCKING & FREIGHT - 1.1%
Airborne Freight Corp. 716,900 24,912 00926610
Arkansas Best Corp. (f) 1,859,800 24,177 04079010
Consolidated Freightways, Inc. (a)(f) 2,063,000 54,154 20923710
Federal Express Corp. (a) 361,000 24,142 31330910
Landstar System, Inc. (a)(f) 777,200 17,487 51509810
MS Carriers, Inc. (f) 1,013,600 22,806 55353310
Roadway Services, Inc. 180,100 12,202 76974810
Rollins Truck Leasing Corp. 1,180,750 21,106 77574110
Swift Transportation Co., Inc. (a)(f) 1,224,000 32,130 87075610
TNT Freightways Corp. (f) 1,235,600 30,118 87259J10
Trimac Ltd. 131,500 1,651 89620810
Werner Enterprises, Inc. 660,000 18,728 95075510
XTRA Corp. (f) 1,688,000 69,841 98413810
Yellow Corp. 399,100 9,529 98550910
362,983
TOTAL TRANSPORTATION 2,003,072
UTILITIES - 6.6%
CELLULAR - 0.7%
Cencall Communications Corp. (a) 295,100 6,935 15129710
Century Telephone Enterprises, Inc. 32,400 749 15668610
IDB Communications Group, Inc. 1,748,640 28,634 44935510
Nextel Communications, Inc. (a) 1,024,800 40,223 65332V10
Pactel Corp. (a) 4,628,100 95,455 69525210
Qualcomm, Inc. 215,500 5,280 74752510
Vodafone Group PLC sponsored ADR 604,900 46,804 92857T10
224,080
ELECTRIC UTILITY - 2.2%
American Electric Power Co., Inc. 594,600 18,284 02553710
Entergy Corp. 11,126,500 353,266 29364G10
Illinois Power Co. 568,700 11,516 45209210
Niagara Mohawk Power Corp. 3,671,500 65,628 65352210
Pinnacle West Capital Corp. (f) 7,004,800 140,096 72348410
Public Service Co. of New Mexico (a) 2,059,400 27,030 74449910
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY -CONTINUED
Public Service Enterprise Group, Inc. 620,800 $ 17,305 74457310
Southern Co. 3,017,800 57,715 84258710
Union Electric Co. 768,600 27,093 90654810
717,933
GAS - 1.8%
Coastal Corp. (The) 1,624,000 49,532 19044110
Enron Corp. 2,272,000 69,296 29356110
Pacific Enterprises 1,451,800 29,399 69423210
Panhandle Eastern Corp. 1,194,500 25,085 69846210
Santa Fe Pacific Pipeline Partners, LP 524,900 18,765 80217710
Seagull Energy Corp. (a)(f) 2,421,174 57,503 81200710
Sonat, Inc. 561,200 15,573 83541510
Tejas Gas Corp. (Del.)(a) 256,200 12,810 87907510
TransCanada PipeLines Ltd. (f) 13,117,100 175,381 89352610
Westcoast Energy, Inc. (f) 5,741,000 95,950 95751D10
Williams Companies, Inc. 2,592,800 62,227 96945710
611,521
TELEPHONE SERVICES - 1.9%
ALC Communications Corp. (a) 230,500 7,664 00157530
Ameritech Corp. 1,174,000 44,759 03095410
Bell Atlantic Corp. 741,800 38,388 07785310
BellSouth Corp. 711,100 41,066 07986010
Comsat Corp. 1,679,400 43,874 20564D10
GTE Corp. 885,600 27,454 36232010
LCI International, Inc. (a) 418,700 16,015 50181310
LDDS Communications, Inc. (a) 927,370 22,257 50182L10
Rochester Telephone Corp. 920,400 39,577 77175810
Southwestern Bell Corp. 2,226,400 89,891 84533310
Sprint Corporation 5,782,400 198,047 85206110
U.S. West, Inc. 1,316,100 53,631 91288910
622,623
TOTAL UTILITIES 2,176,157
TOTAL COMMON STOCKS
(Cost $26,258,195) 29,564,829
PREFERRED STOCKS - 0.5%
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - 0.3%
DURABLES - 0.2%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Chrysler Corp., $4.625 (h) 378,200 $ 54,514 17119670
Federal Mogul Corp. $1.9375 (h) 95,000 8,550 31354920
63,064
FINANCE - 0.1%
BANKS - 0.1%
Citicorp $5.375 (h) 406,829 43,327 17303451
RETAIL & WHOLESALE - 0.0%
GENERAL MERCHANDISE STORES - 0.0%
Hills Stores, Series A 112,027 2,129 17303451
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
National Semiconductor Corp. $3.25 (a) 64,800 5,184 63764050
TOTAL CONVERTIBLE PREFERRED STOCKS 113,704
NONCONVERTIBLE PREFERRED STOCKS - 0.2%
FINANCE - 0.0%
SAVINGS & LOANS - 0.0%
Dime Savings Bank of New York FSB 2,100 2,226 25432R20
Greater New York Savings Bank, Series 11% 234,000 6,552 39225020
8,778
TECHNOLOGY - 0.2%
COMMUNICATIONS EQUIPMENT - 0.2%
Nokia 764,800 55,724 65599910
ELECTRONICS - 0.0%
Berg Electronics Holding Corp. $3.4687 Series E (a) 94,143 2,448
08372640
TOTAL TECHNOLOGY 58,172
TOTAL NONCONVERTIBLE PREFERRED STOCKS 66,950
TOTAL PREFERRED STOCKS
(Cost $118,802) 180,654
CORPORATE BONDS - 2.1%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
CONVERTIBLE BONDS - 0.5%
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
Repap Enterprise Corp.:
9%, 6/30/98 - CAD 12,900 $ 7,738 76026M9A
8 1/2%, 8/1/97 - $ 250 225 76026M9B
7,963
CONGLOMERATES - 0.0%
Polly Peck International PLC 7 1/4%, 1/4/05 (c) - 1,300 247 731991AA
DURABLES - 0.2%
AUTOS, TIRES, & ACCESSORIES - 0.1%
Magna Intenational, Inc. 10%, 5/1/01 (h) - 8,180 44,663 559222AC
CONSUMER ELECTRONICS - 0.1%
Whirlpool Corp. liquid yield option notes 0%,
5/14/11 Baa1 65,000 28,356 963320AJ
TOTAL DURABLES 73,019
FINANCE - 0.1%
BANKS - 0.1%
Bank of New York Co., Inc. 7 1/2%,
8/15/01 Baa1 8,500 11,836 064057AK
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Dylex Ltd., 9%, 8/15/00 - 140 89 267720AA
DRUG STORES - 0.0%
Big Boy, Inc. 6 1/2%, 3/15/03 B2 3,500 3,850 088891AA
TOTAL RETAIL & WHOLESALE 3,939
TECHNOLOGY - 0.2%
COMMUNICATIONS EQUIPMENT - 0.0%
Ericsson (L.M.)Telephone Co. 4 1/4%,
6/30/00 - 5,549 8,822 294821AA
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 0.2%
Data General Corp. 7 3/4%, 6/1/01 B3 $ 20,810 $ 18,729 237688AD
EMC Corp. 6 1/4%, 4/1/02 B2 8,000 51,710 268648AA
70,439
TOTAL TECHNOLOGY 79,261
TOTAL CONVERTIBLE BONDS 176,265
NONCONVERTIBLE BONDS - 1.6%
AEROSPACE & DEFENSE - 0.0%
AEROSPACE & DEFENSE - 0.0%
Fairchild Industries, Inc. 12 1/4%, 2/1/99 B2 1,540 1,544 303711AL
K&F Industries, Inc. 11 7/8% 12/1/03 B1 1,700 1,598 482240AB
3,142
DEFENSE ELECTRONICS - 0.0%
Tracor, Inc. 10 7/8%, 8/15/01 B2 7,750 7,828 892349AC
TOTAL AEROSPACE & DEFENSE 10,970
BASIC INDUSTRIES - 0.3%
CHEMICALS & PLASTICS - 0.2%
Applied Extrusion Technologies, Inc. 11 1/2%
4/1/02 (h) B3 5,000 5,000 038196AA
IMC Fertilizer Group, Inc. 9 1/4%, 10/1/00 B3 5,000 4,850 449669AH
Ivex Holdings Corp. 13 1/4%, 3/15/05 (j) Caa 15,250 7,720 465851AB
Methanex Corp. 8 7/8%, 11/15/01 Ba3 4,000 3,870 59151KAA
OSI Specialties, Inc. 9 1/4%, 10/1/02 B1 1,160 1,114 671042AA
Rexene Corp.:
pay-in-kind 10%, 11/15/02 - 540 439 761683AB
9%, 11/15/99 - 1,060 986 761683AA
Sherritt Incorporated 10 1/2%, 3/31/14 B1 4,880 4,862 824287AB
Trans Resources, Inc.:
14 1/2%, 9/1/96 B2 5,000 5,550 893320AB
11 7/8%, 7/1/02 (h) B2 2,500 2,475 893320AD
UCC Corp. 9%, 9/1/00 B1 8,655 8,439 90915TAA
45,305
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - 0.0%
AK Steel 10 3/4%, 4/1/04 B2 $ 5,830 $ 5,830 001546AA
METALS & MINING - 0.0%
Kaiser Aluminum & Chemical Corp.:
9 7/8%, 2/15/02 B2 6,000 5,625 483008AE
12 3/4%, 2/1/03 B1 7,750 7,983 483008AD
13,608
PAPER & FOREST PRODUCTS - 0.1%
Crown Packaging Holdings Ltd. 0%,
11/1/03 (j) Caa 6,400 3,136 228444AB 228443AC
Crown Packaging Ltd. 10.75%, 11/1/00 B3 5,000 5,025 228444AB
Repap Enterprises, Inc. (i):
6 1/8%, 7/21/97 - 9,078 6,899 76026M9D
euro 6 1/8%, 7/21/97 - 4,000 3,040 76026M9C
Repap Wisconsin, Inc.:
9 1/4%, 2/1/02 B1 3,000 2,880 76026LAA
9 7/8%, 5/1/06 B3 3,000 2,850 76026LAB
Stone Container Corp.:
10 3/4%, 6/15/97 B2 5,770 5,655 861589AG
11 7/8%, 12/1/98 B1 6,330 6,409 861589AD
9 7/8%, 2/1/01 B1 6,000 5,490 861589AK
41,384
TOTAL BASIC INDUSTRIES 106,127
CONGLOMERATES - 0.1%
Coltec Industries, Inc. 10 1/4%, 4/1/02 Ba2 12,500 12,625 196879AB
Insilco Corp.:
9 1/2%, 7/1/97 Ca 4,000 3,920 457659AC
9 1/2%, 7/1/97 (g) Ca 2,620 2,620 4576599C
Sequa Corp. 9 3/8%, 12/15/03 B3 1,220 1,159 817320AG
20,324
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Adience, Inc. 11%, 6/15/02 - 3,995 3,156 006905AA
National Gypsum Co. 10%, 7/30/03 B1 44 44 636317AA
Triangle Pacific Corp. 10 1/2%, 8/1/03 B2 2,840 2,854 895912AC
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
USG Corp.:
8%, 12/15/95 B3 $ 5,025 $ 5,025
9%, 12/15/98 B3 3,411 3,411 903293AH
9 1/4%, 9/15/01 (h) - 6,595 6,529 90399BAX
10 1/4%, 12/15/02 B2 750 763 903293AL
8 3/4%, 3/1/17 B3 1,840 1,776 903293AJ 903293AC
23,558
CONSTRUCTION - 0.0%
Hillsborough/Jim Walter Corp. 17%, 1/1/96 (b) Ca 11,656 10,257 373280AE
U.S. Home Corp. 9 3/4%, 6/15/03 Ba3 5,800 5,786 911920AB
16,043
TOTAL CONSTRUCTION & REAL ESTATE 39,601
DURABLES - 0.1%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Chrysler Corp. 9.60%, 7/15/94 Baa2 1,500 1,516 171196AL
Hayes Wheels International, Inc. 9 1/4%,
11/15/02 Ba2 5,540 5,942 420804AA
Lear Seating Corp. 11 1/4%, 7/15/00 B2 1,500 1,598 521893AA
9,056
TEXTILES & APPAREL - 0.1%
Dan River, Inc. 10 1/8%, 12/15/03 B3 3,000 2,835 235773AA
Leslie Fay Companies, Inc. (b)(g):
9.53%, 1/15/00 - 8,931 7,546 5270109H
10.54%, 1/15/02 - 8,073 5,732 5270109J
16,113
TOTAL DURABLES 25,169
ENERGY - 0.1%
ENERGY SERVICES - 0.0%
Falcon Drilling, Inc. 9 3/4%, 1/15/01 (h) B2 3,710 3,562 305914AA
TransTexas Gas Corp. 10 1/2%, 9/1/00 B1 5,100 5,304 893895AA
8,866
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - CONTINUED
INDEPENDENT POWER - 0.1%
California Energy Corp., Inc. 0/10.25%,
1/15/04 Ba3 $ 26,500 $ 19,875 130190AC
OIL & GAS - 0.0%
Mesa Capital Corp (i).:
secured 0%, 6/30/98 B3 10,381 9,136 590910AF
0%, 6/30/96 - 3,480 2,897 590910AD
YPF Sociedad Anonima SA 8%, 2/5/04 B1 3,330 2,980 984245AA
15,013
TOTAL ENERGY 43,754
FINANCE - 0.0%
CREDIT & OTHER FINANCE - 0.0%
GPA Delaware, Inc. gtd. notes 8 3/4%,
12/15/98 Caa 370 307 361928AA
LaSalle National Trust NA, Trust No. 118501
mortgage note 6,100 6,100 90399BAW
Tiphook Finance Corp. 8%, 3/15/00 B3 560 431 887795AB
6,838
INSURANCE - 0.0%
Chartwell Reinsurance Corp. 10 1/4%, 3/1/04 Ba3 4,370 4,304 16139WAA
TOTAL FINANCE 11,142
HEALTH - 0.0%
MEDICAL FACILITIES MANAGEMENT - 0.0%
American Healthcare Management, Inc.
10% 8/1/03 B2 11,500 11,759 026496AD
Hallmark Healthcare Corp. 10 5/8%, 11/15/03 B3 3,110 3,024 40624GAA
14,783
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.0%
Ametek, Inc. 9 3/4%, 3/15/04 Ba3 3,140 3,148 031105AA
Ampex, Inc.:
20%, 3/15/94 - 953 953 0320929K
Unit 14%, 1/15/98 (g)(j) - 6,500 4,030 0320929F
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
ELECTRICAL EQUIPMENT - CONTINUED
Telex Communications Group 15/16%,
9/30/94 - $ 1,800 $ 1,800 87999AAD
9,931
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Joy Technologies, Inc. 10 1/4%, 9/1/03 B1 5,270 5,270 481206AD
Maritime Group Ltd. 13 1/2%, 2/15/97 (h) - 1,420 1,401 570998AB
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 - 1,413 1,441 883435AA
10 3/4%, 11/1/03 - 1,959 1,998 883435AB
10,110
POLLUTION CONTROL - 0.0%
Envirosource, Inc. 9 3/4%, 6/15/03 B3 2,400 2,220 29409KAB
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 22,261
MEDIA & LEISURE - 0.5%
BROADCASTING - 0.2%
Act III Broadcasting, Inc. 9 5/8%, 12/15/03 B3 1,110 1,066 00503KAA
Argyle Television 9 7/8%, 12/30/03 7,910 7,515 04031KAA
Cablevision System Corp. sr. sub. deb.
9 7/8%, 2/15/13 B2 5,000 5,000 12686CAD
Century Communications Corp. 11 7/8%,
10/15/03 B2 3,000 3,240 156503AC
Continental Cablevision, Inc.:
9 1/2%, 8/1/13 Ba2 4,850 4,705 211177AK
9%, 9/1/08 Ba2 5,200 4,992 211177AG
Helicon Group LP/Helicon Cap Corp. 10 3/4%,
11/1/03 Caa 5,000 4,700 423265AB
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 10,000 10,100 770685AA
SCI Television, Inc. secured:
variable rate 7 1/2%, 6/30/98 - 6,895 6,619 783895AK
11%, 6/30/05 - 26,046 26,176 783895AJ
74,113
LODGING & GAMING - 0.1%
Bally Gaming International, Inc. 10 3/8%,
7/29/98 - 7,500 7,500 0587319C
Bally's Grand, Inc. 10 3/8%, 12/15/03 (h) B2 3,000 2,955 05873JAD
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
Casino Magic Financial Corp. 11 1/2%,
10/15/01 $ 3,120 $ 3,120 14759BAC
Embassy Suites, Inc.:
gtd. 8 3/4%, 3/15/00 (h) B1 3,000 2,940 290807AH
10 7/8%, 4/15/02 B1 4,000 4,340 290807AF
Fitzgeralds Gaming Corporation 13%,
3/15/96 unit bond (1,000 bonds
and 1.54 stock warrants)(h)(i) - 2,500 2,500 338270AA
Host Marriott Corp. 10 1/2%, 5/1/06 B1 7,158 7,167 441080AH
Resorts International, Inc. secured pay-in-kind (b):
6%, 4/15/94 Ca 3,815 2,416 761185AG
15%, 4/15/94 Ca 4,102 2,535 761185AH
35,473
PUBLISHING - 0.1%
GACC Holding Co. 9 3/4%, 3/1/04 (g) - 30,000 29,550 3613549B
RESTAURANTS - 0.1%
Cafeteria Operators LP 11%, 6/30/98 (b)(g) - 5,000 3,000 127998AC
Flagstar Corp.:
10 7/8%, 12/1/02 B1 5,000 4,950 338473AA
11 1/4%, 11/1/04 B2 10,000 9,800 338473AB
17,750
TOTAL MEDIA & LEISURE 156,886
NONDURABLES - 0.1%
BEVERAGES - 0.0%
Dr. Pepper/Seven-Up Companies, Inc.
0%, 11/1/02 (j) B3 7,093 5,462 256131AD
HOUSEHOLD PRODUCTS - 0.1%
Revlon World Wide secured 0%, 3/15/98 B3 33,130 14,908 76154KAB
TOTAL NONDURABLES 20,370
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - 0.1%
APPAREL STORES - 0.1%
Apparel Retailers, Inc. 12 3/4%, 8/15/05 Caa $ 2,830 $ 1,641 037795AB
Lamonts Apparel Corp. 10 1/4%, 11/1/99 - 8,267 7,998 513628AB
9,639
GENERAL MERCHANDISE STORES - 0.0%
Astrum International Corp. secured 11 1/2%,
6/8/03 - 5,696 5,924 04648TAA
Hills Stores 10 1/4%, 9/30/03 453,000 448 556994CF
6,372
GROCERY STORES - 0.0%
Penn Traffic Co. 9 5/8%, 4/15/05 B2 2,810 2,754 707832AD
Ralph's Grocery Co. 10 1/4%, 7/15/02 B2 3,800 3,838 751253AB
6,592
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Brylane LP/B Note 10%, 9/1/03 2,000 2,100 117662AC
Color Tile, Inc. 10 3/4%, 12/15/01 B2 370 364 196267AD
2,464
TOTAL RETAIL & WHOLESALE 25,067
SERVICES - 0.0%
Neodata Corp. B 12%, 5/1/03 (j) 1,160 916 640455AC
TECHNOLOGY - 0.0%
COMPUTER SERVICES & SOFTWARE - 0.0%
Computervision Corp. 10 7/8%, 8/15/97 B2 1,840 1,757 20557TAA
ELECTRONICS - 0.0%
Berg Electronics 11 3/8%, 5/1/03 B3 3,500 3,605 083727AB
TOTAL technololgy 5,362
TRANSPORTATION - 0.0%
SHIPPING - 0.0%
Sea Containers Ltd. 9 1/2%, 7/1/03 Ba3 5,400 5,130 811371AD
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - 0.1%
CELLULAR - 0.0%
Cencall Communications Corp. 0%, 1/15/04 Caa $ 6,770 $ 3,994 151297AB
Horizon Cellular Telephone 0%,10/1/00 (j) Caa 10,200 6,834 440415AB
Nextel Communications, Inc. 0%, 8/15/04(j) B3 3,830 2,288 65332VAB
13,116
ELECTRIC UTILITY - 0.1%
Del Norte Funding Corp. secured leasing
oblig. 11 1/4%, 1/2/14 (b) Ca 8,965 7,643 245279AC
El Paso Funding Corp. lease oblig. (b):
9 3/8%, 10/1/96 Ca 6,175 5,249 283681AB
10 3/4%, 4/1/13 Ca 3,340 2,839 283681AC
15,731
GAS - 0.0%
Columbia Gas Systems, Inc. (b):
7 1/2%, 6/1/97 Caa 3,080 3,450 197648BG
10.15%, 11/1/13 Caa 2,900 3,567 197648BW
7,017
TOTAL UTILITIES 35,864
TOTAL NONCONVERTIBLE BONDS 543,726
TOTAL CORPORATE BONDS
(Cost $622,250) 719,991
FOREIGN GOVERNMENT OBLIGATIONS - 0.0%
Argentina Republic BOTE 1.855%, 5/31/96 (i)
(Cost $6,723) 15,000 7,502 0401149D
U.S. TREASURY OBLIGATIONS - 5.2%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)(000S) (000S)
4 5/8%, 12/31/94 Aaa $ 150,000 $ 150,281 912827H9
8 5/8%, 1/15/95 Aaa 150,000 154,734 912827VT
5 1/2%, 2/15/95 Aaa 150,000 151,242 912827E2
7 3/4%, 2/15/95 Aaa 150,000 154,079 912827YG
3 7/8%, 2/28/95 Aaa 150,000 149,156 912827J8
3 7/8%, 3/31/95 Aaa 150,000 149,016 912827K2
8 3/8%, 4/15/95 Aaa 150,000 155,508 912827WB
3 7/8%, 4/30/95 Aaa 150,000 148,781 912827K5
5 7/8%, 5/15/95 Aaa 150,000 151,899 912827F3
8 1/2%, 5/15/95 Aaa 50,000 52,024 912827YQ
4 1/8%, 5/31/95 Aaa 150,000 149,016 912827K9
4 1/4%, 7/31/95 Aaa 150,000 148,875 912827L5
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,736,938) 1,714,611
OTHER SECURITIES - 0.7%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (D)(000S) (000S)
BASIC INDUSTRIES - 0.0%
CHEMICALS & PLASTICS - 0.0%
Trivest 1992 Special Fund Ltd. term loan 0%,
10/31/98 (g) $ 26.6(k) $ 6,767 0491479A
PURCHASED BANK DEBT - 0.6%
Belmont L.V. Land L.P. variable rate 7/16/97 8,182 6,392 080992AA
El Paso Electric Co.:
letter of credit 5/1/98 (b) 8,837 7,511 2836779A
unsecured floating rate:
4/1/95 (b) 826 702 2836779P
12/1/95 (b) 661 562 2836779K 2836779L
variable rate term loan:
10/26/94 7,500 7,538 2836779P
5/1/96 (b) 11,842 10,066 2836779P
variable rate secured term loan 1/4/95 2,856 2,870 2836779F 2836779J
Leslie Fay Cos., Inc. (b): 5270109K
variable rate revolving loan 1/15/96 8,001 6,761 5270109E
variable rate term loan 1/15/96 10,268 8,677 5270109A
noteholder payment 1/15/96 1,056 892 5270109A
Macy 10 Special Real Estate Cap. 0%,
9/30/95 (b) 5,369 5,342 557991AA
OTHER SECURITIES - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (D)(000S) (000S)
PURCHASED BANK DEBT - CONTINUED
Macy (R.H.)& Co., Inc. (b):
letters of credit: 556994BA
5/24/94 $ 1,766 $ 1,704 556994AU
5/27/94 21,840 21,268 5561399D
7/10/94 4,196 4,140 556994AF
5/27/95 4,023 4,003 556994CJ
mortgage loan participations:
5/27/94 30,351 29,735 5561399H
5/27/95 2,000 1,990 556994CK
variable rate revolving loans: 556994AE
5/24/94 563 544 556994AT
5/27/94 9,404 9,207 556994BB
7/10/94 1,216 1,210 556994AJ
5/27/95 1,283 1,277 556994CH
variable rate term loans:
5/24/94 744 718 556994CP
5/27/94 16,227 15,690 556994CD
5/27/95 8,397 8,355 556994AS
5/27/96 19,751 19,652 556993BD
variable rate notes:
5/27/94 801 773 556994AC
7/10/94 1,597 1,590 556994CA
12/21/94 9,693 9,645 5561399Y
Maxwell Communications Corp. PLC (b):
term loan variable rate notes 10/23/95 8,426 2,865 5777329F
variable rate revolving loan 10/23/95 4,289 1,614 5777329B
193,293
TRADE CLAIMS RECEIVABLES - 0.1%
Hills Department Stores, Inc. 1,303 1,080 43165992
Lone Star Industries, Inc. 24,788 24,788 5422909A
25,868
TOTAL OTHER SECURITIES
(Cost $180,456) 225,928
REPURCHASE AGREEMENTS - 2.4%
MATURITY VALUE (NOTE 1)
AMOUNT (000S)
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.58%
dated 3/31/94 due 4/4/94 $ 785,087 $ 784,775
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $29,708,139) $ 33,198,290
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
54,110,000 JPY 9/8/94 to 9/14/94 $531,716 $ (14,716)
(Receivable amount $517,000)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES --1.60%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
JPY - Japanese yen
LEGEND
(a) Non-income producing
(b) Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
(c) Non-income producing - the company moved to seek a court appointed
administrator under British bankruptcy law.
(d) Principal amount is stated in United States dollars unless otherwise
noted.
(e) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(f) Affiliated company (see Note 5 of Notes to Financial Statements).
(g) Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 1 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
Ampex, Inc. 14%,
1/15/98 12/10/92 $ 5,050
Atlantis Group, Inc.
(Trivest/Winston) 4/16/93 $ 90
Bally's Gaming
International, Inc.
(warrants) 7/29/98 6/29/93 $ -
Cafeteria Operators
LP 11%, 6/30/98 6/24/93 $ 4,000
GACC Holding Co.
9 3/4%, 3/1/04 2/4/94 $ 29,302
Heileman G. Brewing
Inc. 1/24/94 $ 6,800
Insilico Corp.
9.5%, 7/1/97 7/14/93 $ 2,623
Leslie Fay
9.53%, 1/15/00 7/19/93 $ 6,765
Leslie Fay
10.54%, 1/15/02 7/19/93 $ 4,132
Trivest 1992
Special Funding
Ltd. Term Loan 7/2/92 $ 6,560
(h) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $178,965,000 or 0.5% of net
assets.
(i) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(j) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(k) Represents number of units held.
INCOME TAX INFORMATION
At March 31, 1994, the aggregate cost of investment securities for income
tax purposes was $29,832,407,000. Net unrealized appreciation aggregated
$3,365,883,000, of which $4,650,479,000 related to appreciated investment
securities and $1,284,596,000 related to depreciated investment securities.
The fund hereby designates $144,000,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MARCH 31, 1994
ASSETS
Investment in securities, at value (including repurchase $ 33,198,290
agreements of $784,775) (cost $29,708,139) (Notes 1
and 2) - See accompanying schedule
Short foreign currency contracts (Note 2) $ (531,716)
Contracts held, at value
Receivable for contracts held 517,000 (14,716)
Cash 1
Receivable for investments sold 1,409,916
Receivable for fund shares sold 326,738
Dividends receivable 40,519
Interest receivable 36,441
Other receivables 6,667
TOTAL ASSETS 35,003,856
LIABILITIES
Payable for investments purchased 1,458,144
Payable for fund shares redeemed 396,546
Accrued management fee 21,808
Other payables and accrued expenses 7,892
TOTAL LIABILITIES 1,884,390
NET ASSETS $ 33,119,466
Net Assets consist of (Note 1):
Paid in capital $ 28,265,640
Undistributed net investment income 94,879
Accumulated undistributed net realized gain (loss) on 1,283,512
investments
Net unrealized appreciation (depreciation) on:
Investment securities 3,490,151
Foreign currency contracts (14,716)
NET ASSETS, for 475,054 shares outstanding $ 33,119,466
NET ASSET VALUE and redemption price per share $69.72
($33,119,466 (divided by) 475,054 shares)
Maximum offering price per share (100/97.00 of $69.72) $71.88
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED MARCH 31, 1994
INVESTMENT INCOME $ 401,004
Dividends (including $79,714 received from affiliated
issuers) (Note 5)
Interest 213,077
TOTAL INCOME 614,081
EXPENSES
Management fee (Note 4) $ 186,492
Basic fee
Performance adjustment 40,010
Transfer agent fees (Note 4) 66,504
Accounting fees and expenses (Note 4) 852
Non-interested trustees' compensation 183
Custodian fees and expenses 882
Registration fees 2,349
Audit 265
Legal 335
Miscellaneous 1,467
Total expenses before reductions 299,339
Expense reductions (Note 6) (5,280) 294,059
NET INVESTMENT INCOME 320,022
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1 AND 3)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of 2,963,642
$377,710 on sales of investment in affiliated issuers)
(Note 5)
Foreign currency contracts (40,460) 2,923,182
Change in net unrealized appreciation (depreciation) on:
Investment securities (21,625)
Foreign currency contracts (12,221) (33,846)
NET GAIN (LOSS) 2,889,336
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 3,209,358
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
1994 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 320,022 $ 453,658
Net investment income
Net realized gain (loss) on investments 2,923,182 2,672,685
Change in net unrealized appreciation (depreciation) (33,846) 399,329
on
investments
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,209,358 3,525,672
FROM OPERATIONS
Distributions to shareholders (300,411) (399,316)
From net investment income
From net realized gain (2,583,157) (2,740,917)
TOTAL DISTRIBUTIONS (2,883,568) (3,140,233)
Share transactions 10,878,472 6,334,732
Net proceeds from sales of shares
Reinvestment of distributions from: 293,794 389,237
Net investment income
Net realized gain 2,539,743 2,687,960
Cost of shares redeemed (5,804,748) (4,735,273)
Net increase (decrease) in net assets resulting from 7,907,261 4,676,656
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,233,051 5,062,095
NET ASSETS
Beginning of period 24,886,415 19,824,320
End of period (including undistributed net investment $ 33,119,466 $ 24,886,415
income of $94,879 and $338,771, respectively)
OTHER INFORMATION
Shares
Sold 150,758 96,019
Issued in reinvestment of distributions from: 4,280 6,236
Net investment income
Net realized gain 37,076 42,415
Redeemed (80,692) (72,034)
Net increase (decrease) 111,422 72,636
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED MARCH 31,
1994 1993 1992 1991 1990
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 68.44 $ 68.13 $ 64.84 $ 58.60 $ 52.92
period
Income from Investment
Operations
Net investment income .61 1.20 .81 1.39 1.35
Net realized and unrealized 7.92 9.18 9.21 8.10 9.39
gain (loss) on investments
Total from investment 8.53 10.38 10.02 9.49 10.74
operations
Less Distributions
From net investment income (.75) (1.25) (1.30) (.83) (1.24)
From net realized gain (6.50) (8.82) (5.43) (2.42) (3.82)
Total distributions (7.25) (10.07) (6.73) (3.25) (5.06)
Net asset value, end of period $ 69.72 $ 68.44 $ 68.13 $ 64.84 $ 58.60
TOTAL RETURN (dagger)(double dagger) 12.94% 17.06% 16.48% 17.26% 20.32%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 33,119 $ 24,886 $ 19,824 $ 14,808 $ 13,162
(in millions)
Ratio of expenses to average .99%(diamond) 1.00% 1.05% 1.06% 1.03%
net assets
Ratio of expenses to average 1.00%(diamond) 1.00% 1.05% 1.06% 1.03%
net assets before expense
reductions
Ratio of net investment income 1.07% 2.11% 1.57% 2.47% 2.54%
to average net assets
Portfolio turnover rate 132% 155% 172% 135% 82%
</TABLE>
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
(double dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN.
(diamond)SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended March 31, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Magellan Fund (the fund) 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 and is
authorized to offer an unlimited number of shares. The following summarizes
the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
are valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
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 the fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Dividend and
interest income is recorded net of foreign taxes where recovery of such
taxes is not assured.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions 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
foreign
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
currency transactions, market discount, partnerships, non-taxable dividends
and losses deferred due to wash sales and excise tax regulations. The fund
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for income
tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective April 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 March 31, 1993 have been reclassified to reflect
an increase in paid in capital of $770,962,000, a decrease in undistributed
net investment income of $216,867,000 and a decrease in accumulated net
realized gain on investments of $554,095,000.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser,
2. OPERATING POLICIES -
CONTINUED
REPURCHASE AGREEMENTS -
CONTINUED
Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $68,083,000 or .21% of net assets.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $43,050,536,000 and $36,091,387,000, respectively, of which U.S.
government and government agency obligations aggregated $2,038,273,000 and
$3,211,199,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, 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 the fund. The
group fee rate is the weighted average of a series of rates ranging from
.31% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .30%.
The basic fee is subject to a performance adjustment (up to a maximum of +
or - .20%) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .76% of average net
assets after the performance adjustment.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. 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.
Shareholders approved a new management contract containing the lower group
fee rates on March 23, 1994.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $44,752,000 on sales of shares of the fund.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $24,771,000 for the period.
5. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
DOLLAR AMOUNTS IN THOUSANDS
PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
ADAPTEC, Inc. (a) $ 47,192 $ - $ - $ 93,790
AST Research, Inc. (a) 30,778 22,605 - 42,035
Advanced Micro Devices,
Inc. (a) 131,983 89,195 - 252,983
Affiliated Publication Devices, Inc. - - - -
Aldus Corp. 6,531 6,482 - -
Alex Brown, Inc. 9,726 14,800 125 -
Allen Group 16,498 29,022 60 -
Altera Corp. 7,841 9,073 - -
Amdahl Corp. 24,458 - - 62,509
American President
Companies Ltd. 35,531 29,112 556 39,509
Amphenol Corp. (a) 16,095 5,251 - 45,563
Anadarko Petroleum Corp. 94,444 137,733 1,312 142,250
Analog Devices, Inc. (a) 19,243 49,373 - -
Analogic Corp. (a) 8,745 - - 18,840
Anderson Exploration Ltd. (a) 4,042 - - 38,974
Apache Corp. 46,930 5,790 1,095 110,359
Applied Magnetics Corp. 4,568 16,039 - -
Arkansas Best Corp. 6,055 6,683 71 24,177
Armstrong World Industries, Inc. 26,756 - 579 131,090
Arrow Electronics, Inc. (a) 10,401 13,548 - -
Atmel Corp. (a) 158,019 16,941 - 71,208
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Augat, Inc. (a) $ 14,839 $ 746 $ - $ 37,992
Avnet, Inc. 58,680 33,576 1,622 107,674
Baker Hughes, Inc. 14,172 93,295 2,351 -
Baker (J.), Inc. - - - -
Bally's Grand, Inc. - - - -
Baroid Corp. 22,228 23,743 864 -
Best Buy Co., Inc. (a) 53,876 36,430 - 93,321
Bethlehem Steel Corp. (a) 34,203 10 - -
Beverly Enterprises, Inc. - - - -
Briggs & Stratton Corp. 11,674 - - 73,013
Brown Group, Inc. 5,169 - - 38,790
Brunswick Corp. 58,894 - - 160,776
Burlington Coat Factory
Warehouse Corp. (a) 14,284 - - 66,272
Burlington Resources, Inc. 148,358 25,445 4,635 387,013
CML Group, Inc. (a) 178,889 60,472 64 -
CSX Corp. 8,166 - - 438,446
Cabot Corp. 37,919 18,840 1,183 72,149
California Microwave Corp. - 6,095 - -
Canadian Natural
Resources Ltd. (a) 12,974 - - 51,009
Cedar Fair LP. - 127 2,142 37,018
Centex Corp. 30,656 18,349 426 60,950
Chipcom Corp. (a) 4,351 2,632 - 30,030
Chiquita Brands, Inc. 2,564 - - 43,399
Cincinnati Milicron, Inc. 424 655 - -
Cirrus Logic, Inc. (a) 44,517 53,748 - 49,460
Claire's Stores, Inc. 8,761 1,492 146 28,352
Clothestime, Inc. (a) 3,913 4,686 - -
Coast Savings Financial, Inc. (a) 900 1,568 - 13,578
Columbia/HCA Healthcare Corp. 58,634 - 666 397,670
Conner Peripherals, Inc. (a) 39,203 12,238 - 63,262
Consolidated Freightways, Inc. (a) 3,202 - - 54,154
Consolidated Stores Corp. (a) 44,977 23,010 - 60,925
Cordis Corp. (a) 27,428 - - 61,627
Cypress Semiconductor Corp. 57,320 26,739 - 58,056
Cyprus Minerals Co. 10,137 10,556 526 -
DSC Communications Corp. (a) 14,078 23,301 - -
Dallas Semiconductor Corp. (a) 1,795 14,852 - 22,236
Data General Corp. - 11,802 - -
Dell Computer Corporation (a) 15,664 - - 69,112
Devon Energy Corp. 342 6,849 223 28,260
Diamond Shamrock R&M, Inc. 6,721 2,003 - 44,754
Diebold, Inc. 31,022 11,795 2,111 99,448
Dress Barn, Inc. (a) 9,027 6,665 - 22,642
EMC Corp. (a) 78,727 55,617 - 226,851
Echlin, Inc. 57,445 16,763 3,211 131,821
Elcor Corp. 7,286 8,678 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Electronics For Imaging
Incorporated (a) $ - $ 2,476 $ - $ -
Energy Service Co. (a) 26,995 - - 64,470
Exabyte (a) 8,609 - - 28,634
Enterra Corp. 2,474 3,098 - -
Federated Department
Stores, Inc. (a) 16,925 42,997 - -
Figgie International Holdings, Inc. - - - -
FirstFed Michigan Corp. 1,532 - 563 26,214
Fleetwood Enterprises, Inc. 48,135 3,681 2,062 93,028
Foote Cone & Belding
Communications, Inc. 9,662 - 254 35,906
Foster Wheeler Corp. 21,828 501 - 92,216
Genesco, Inc. 6,732 8,689 - -
Global Marine, Inc. (a) - - - -
Hall Mark Electronics Corp. - - - -
Halliburton Co. 7,419 21,435 3,040 -
Harris Corp. 13,072 - - 108,816
Hillhaven Corp. - 3,434 - -
Home Shopping Network, Inc. (a) - - - -
Hospitality Franchise Systems,
Inc. (a) 6,460 11,742 - -
Hudson Bay Corp. 38,273 30,564 - 67,571
Indresco, Inc. (a) 18,601 6,770 - 28,307
Integrated Device
Technology, Inc. (a) 8,080 4,926 - 49,301
Intelligent Electronics, Inc. 24,082 - 444 71,380
Itel Corp. (a) 42,153 1,526 - 74,740
Jones Apparel Group, Inc. (a) - 645 - 40,964
KLA Instrument Corp. (a) 19,274 17,065 - -
Kansas City Southern
Industries, Inc. 46,867 21,440 722 138,530
Kaufman & Broad Homes Corp. 13,599 14,656 284 -
Kelley Oil & Gas Partners Ltd. 2,167 - 249 -
Kemet Corp. - - - -
Kent Electronics Corp. (a) 1,006 3,204 - 9,009
Kerr-Mcgee Corp. 19,624 20,660 1,973 -
Komag, Inc. (a) 45,768 25,172 - 48,486
LDDS Communications, Inc. (a) - 3,305 - -
LSI Logic Corp. (a) 28,708 10,917 - 99,062
Landstar System, Inc. (a) - - - 17,487
La-Z-Boy Chair Co. 2,966 2,727 - 32,374
Lennar Corp. 2,560 - 26 29,115
Lotus Development Corp. (a) 128,582 28,504 - 298,243
Lowe's Companies, Inc. 76,542 36,576 - 299,022
MNC Financial Corp. - 5,937 - -
MS Carriers, Inc. 8,858 5,733 - 22,806
MagneTek, Inc. 1,694 10,671 - -
Mark IV Industries, Inc. 19,690 1,912 153 54,841
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Marshall Industries, Inc. (a) $ 17,697 $ 1,304 $ - $ 42,322
Maxim Integrated Products,
Inc. (a) 6,301 8,264 - -
McKesson Corp. 81,307 - 2,776 220,420
Medusa Corp. 5,657 - - 30,082
Mesa, Inc. (a) - - - 12,737
Micron Technology, Inc. (a) 65,431 64,045 - -
Mirage Resorts, Inc. (a) 35,477 35,964 - -
Mitchell Energy &
Development Corp. 7,103 5,778 - 22,590
Mobile Telecommunications
Technologies, Inc. 23,586 21,972 - -
Mueller Industries, Inc. (a) 2,162 - - 28,235
Mutual Risk Management Ltd. 1,264 2,416 68 -
Mylan Laboratories, Inc. 26,760 28,087 161 -
Nacco Industriess, Inc. 9,823 9,083 352 23,869
Nabors Industries, Inc. (a) 8,785 - - 32,688
National Gypsum Co. (a) 27,808 14,890 - 64,376
National Semiconductor Corp. (a) 71,691 60,307 53 192,973
Network General Corp. 1,979 - - 19,321
Nine West Group, Inc. (a) 28,233 36 - 86,237
Noble Affiliates, Inc. 31,204 28,884 629 79,486
Noble Drilling Corp. (a) 15,726 1,869 - 28,162
Northstar Energy (a) 7,229 - - 24,214
Novellus Systems, Inc. (a) 8,202 8,929 - -
Oak Industries, Inc. (a) 11,922 3,549 - 23,071
Oakwood Homes Corp. 15,767 1,966 88 33,596
Omnicom Group 75,365 17,786 839 139,697
PHM Corp. - - - -
Paragon Trade Brands, Inc. (a) 5,420 12,395 - -
Parker Drilling Corp. (a) 9,751 - - 29,558
Parker & Parsley Petroleum Co. 24,559 1,179 244 56,757
Payless Cashways, Inc. (a) 27,017 4,450 - 48,426
Pinnacle West Capital Corp. 54,435 5,962 2,214 140,096
Pioneer Standard Electronics, Inc. 236 282 161 22,246
Pittston Company Service Group 52,649 - 467 96,545
Pogo Producing Co. (a) 6,926 5,489 - 52,978
Premark International, Inc. 15,241 - 453 128,902
Premdor, Inc. (a) 17,414 - - 39,797
Pulte Corp. 34,119 5,681 493 79,480
Quantum Corp. 25,546 2,098 - 69,512
Reading & Bates Corp. (a) 1,824 150 - 31,237
Recognition Equipment, Inc. (a) 17,990 - - 17,591
Renaissance Energy Ltd. (a) 39,576 - - 156,153
Revco D.S., Inc. (a) 8,568 23,923 - 52,159
Ross Stores (a) 4,463 14,050 66 -
Rowan Cos. Inc. (a) 10,741 37,378 - -
Ryan's Family Steak Houses, Inc. - 12,304 - -
SCI Systems, Inc. (a) 6,911 8,862 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Safecard Services, Inc. $ 16,474 $ 4,854 $ 390 $ 38,462
San Juan Basin Royalty Trust 20 1,622 2,137 29,427
Sanifill, Inc. (a) 119 - - 17,002
Santa Fe Pacific Corp. 48,840 1,519 1,069 266,013
Scientific Atlanta, Inc. - 46,729 306 -
Seagate Technology. (a) 82,861 56,427 - 113,546
Seagull Energy Corp. (a) 14,306 27,094 - 57,503
Showboat, Inc. 24,544 12,484 63 25,553
Silver King Communications, Inc. - - - -
Smith International, Inc. 6,058 16,850 - -
Smith (A. O.) Corp. 11,676 - - 37,226
Snyder Oil Corp. 23,016 451 344 44,897
Southdown, Inc. 10,991 9,794 - 23,116
Spiegel, Inc. 2,787 - 47 21,264
Springs Industries, Inc. 16,369 16,107 813 20,220
Standard Products Co. 8,451 14,623 447 -
Sterling Software, Inc. (a) 2,222 - - 28,609
Sun Television & Appliances, Inc. - 1,922 16 -
Swift Transportation Co., Inc. (a) 8,144 - - 32,130
TJX Companies, Inc. 38,947 93,753 2,006 -
TNT Freightways Corp. 2,703 6,820 431 30,118
TPI Enterprises - 6,643 - -
TRINOVA, Corp. 9,842 4,349 796 55,026
Tecumseh Products Co. 4,149 - - 44,505
Tektronix 3,867 - - 50,563
Tellabs, Inc. (a) 38,727 28,474 - 84,780
Texas Industries 6,914 - - 29,216
Texas Instruments, Inc. 207,680 212,102 4,300 377,127
Tidewater, Inc. 36,310 24,961 1,871 82,179
Toll Brothers Inc. (a) 7,168 - - 29,953
Tosco Corp. 31,828 718 647 77,700
Tommy Hilfiger (a) 13,382 - - 45,898
Transcanada Pipelines Ltd. 20,563 37,633 8,275 175,381
Unocal Corp. 79,915 91,400 7,476 -
U.S. Robotics, Inc. (a) 21,399 8,863 - 31,744
USF&G Corp. 5,510 30,282 855 -
USG Corp. (a) 84,868 13,612 - 124,957
VLSI Technology, Inc. (a) 21,388 - - 48,774
Varian Associates, Inc. 43,381 32,516 291 74,154
Varity Corp. (a) 109,013 49,802 - 146,508
Vintage Petroleum, Inc. 2,649 1,039 70 23,535
Waban, Inc. (a) 21,990 - - 53,771
Walbro Corp. 11,368 1,729 298 23,719
Wallace Computer Services, inc. 3,016 - - 39,544
Weatherford International, Inc. (a) 1,643 2,022 - -
West Coast Energy, Inc. (a) - 4,018 3,225 95,950
Western Co. of North America 7,199 10,102 - -
Western Digital Corp. (a) 7,638 4,827 - 49,766
Wheeling Pittsburg Corp.(a) 2,242 3,653 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Wyle Laboratories $ 3,206 $ - $ 413 $ 22,918
Xtra Corp. 41,071 3,576 327 69,841
Total $ 4,774,511 $ 2,748,089 $ 79,715 $ 10,801,977
(a) Non-income
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$5,280,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders of Fidelity Magellan Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Magellan Fund, including the schedule of portfolio investments, as
of March 31, 1994, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Magellan Fund as of March 31, 1994, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Boston, Massachusetts
April 29, 1994
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Jeff Vinik, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
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 AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty
Growth Company Fund
Low-Priced Stock Fund
Magellan Fund
Mid-Cap Stock Fund
New Millennium Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
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 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Logo
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
Exhibit 1(a)
AMENDED AND RESTATED DECLARATION OF TRUST
DATED APRIL 15, 1994
AMENDED AND RESTATED DECLARATION OF TRUST, made April 15, 1994 by each of
the Trustees whose signature is affixed hereto (the "Trustees")
WHEREAS, the Trustees desire to amend and restate this Declaration of
Trust for the sole purpose of supplementing the Declaration to incorporate
amendments duly adopted; and
WHEREAS, this Trust was initially made on June 25, 1984 by Edward C.
Johnson 3d, Caleb Loring, Jr., and Frank Nesvet inorder to establish a
trust fund for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in Trust
under this Amended and Restated Declaration of Trust as herein set forth
below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Fidelity Magellan Fund."
DEFINITIONS
Section 2. Wherever used hererin, unless otherwise required by the context
or specifically provided:
(a) The Terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Majority Shareholder Vote" (the 67% or 50% requirement of the
third sentence of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings given them
in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to Fidelity Magellan Fund and reference to the
Trust, when applicable to one or more Series of the Trust, shall refer to
any such Series;
(c) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article X, Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for the
time being in office as such trustee or trustees;
(f) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest of the Trust or each Series shall be
divided from time to time, including such class or classes of shares as the
Trustees may from time to time create and establish,including fractions of
shares as well as whole shares consistent with the requirements of Federal
and/or other securities laws; and
(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
(h) "Series" refers to series of Shares of the Trust established in
accordance with the provisions of Article III.
ARTICLE II
PURPOSE OF TRUST
The Purpose of this Trust is to provide investors a continuous source of
managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided into such
transferable Shares of one or more separate and distinct Series or classes
as the Trustees shall from time to time create and establish. The number of
Shares is unlimited and each Share shall be without par value and shall be
fully paid and nonassessable. The Trustees shall have full Power and
authority, in their sole discretion and without obtaining any Prior
authorization or vote of the Shareholders or of any series or class of
Shareholders of the Trust to create and establish (and to change in any
manner) Shares or any series or classes thereof, with such preferences,
voting powers, rights and privileges as the Trustees may from time to time
determine, to divide or combine the Shares or any series or classes thereof
into a greater or lesser number, to classify or reclassify any issued
Shares into one or more Series or classes of Shares, to abolish any one or
more Series of Shares, and to take such other action with respect to the
Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES
Section 2. The establishment of any Series shall be effective upon the
adoption of a resolution by a majority of the then Trustees setting forth
such establishment and designation and the relative rights and preferences
of the Shares of such Series. At any time that there are no Shares
outstanding of any particular Series previously established and designated,
the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books of the
Trust. The Trustees may make such rules as they consider appropriate for
the transfer of Shares and similar matters. The record books of the Trust
shall be conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize. Such
investments may be in the form of cash or securities in which the
appropriate Series is authorized to invest, valued as provided in Article
X, Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding and the amount received by the
Trustees on account of the contribution shall be treated as an asset of the
Trust. Subsequent investments in the Trust shall be credited to each
Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received; provided, however,
that the Trustees may, in their sole discretion, (a) impose a sales charge
upon investments in the Trust and (b) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
Section 5. All consideration received by the Trust for the issue or sale
of Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" that Series. In addition any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which
are not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series in
such manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders
of all Series for all purposes, and shall be referred to as assets
belonging to that Series. The assets belonging to a particular Series shall
be so recorded upon the books of the Trust, and shall be held by the
Trustees in Trust for the benefit of the holders of Shares of that Series.
The assets belonging to each particular Series shall be charged with the
liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees between or among any one or more of the Series in such manner as
the Trustees in their sole discretion deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Any creditor of any Series may look only to the
assets of that Series to satisfy such creditor's debt.
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust
or the Trustees.
LIMITATION OF PERSONAL LIABILITY
Section 7. The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust shall include a
recitation limiting the obligation represented thereby to the Trust and its
assets (but the omission of such a recitation shall not operate to bind any
Shareholder).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility.
ELECTION: INITIAL TRUSTEES
Section 2. On a date fixed by the Trustees, the Shareholders shall elect
not less than three Trustees. A Trustee shall not be required to be a
Shareholder of the Trust. The initial Trustees shall be Edward C. Johnson
3d, William L. Byrnes, and Caleb Loring Jr., and such other individuals as
the Board of Trustees shall appoint pursuant to Section 4 of this Article
IV.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a) that
any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument, signed by at least two-thirds
of the number of Trustees prior to such removal, specifying the date when
such removal shall become effective; (c) that any Trustee who requests in
writing to be retired or who has become incapacitated by illness or injury
may be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may be
removed at any Special Meeting of the Trust by a vote of two-thirds of the
outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. An appointment of a Trustee may be made
by the Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall become
effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16(a) of
the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate his power for a
period not exceeding six months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more than
twelve (12), serving hereunder at any time shall be determined by the
Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is absent from the Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy,
absence or incapacity, shall be conclusive, provided, however, that no
vacancy shall remain unfilled for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets of
the Trust shall at all times be considered as vested in the Trustees. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or any right of partition or possession thereof, but
each Shareholder shall have a proportionate undivided beneficial interest
in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees shall
have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in the Declaration of
Trust or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by
any present or future law or custom in regard to investments by Trustees,
and to sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ a bank or trust company as custodian of any assets of the
Trust subject to any conditions set forth in this Declaration of Trust or
in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or both.
(f) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any officers
of the Trust and to any agent, custodian or underwriter.
(i) To sell or exchange any or all of the assets of the Trust,subject to
the provisions of Article XII, Section 4(b) hereof.
(j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form; or either in its
own name or in the name of a custodian or a nominee or nominees, subject in
either case to proper safeguards according to the usual practice of
Massachusetts trust companies or investment companies.
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III.
(n) To allocate assets, liabilities and expenses of the Trust to a
particular Series, or to apportion the same between or among two or more
Series, provided that any liabilities or expenses incurred by a particular
Series shall be payable solely out of the assets belonging to that Series
as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited
to, claims for taxes.
(q) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided for.
(r) To borrow money and to pledge, mortgage or hypothecate the assets of
the Trust, subject to applicable requirements of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving notice
to such Shareholder.
(t) Notwithstanding any other provision hereof, to invest all of the
assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company;
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares to the same extent as if he were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be issued
and sold Shares to and buy such Shares from any such person of any firm or
company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone
consent provided a quorum of Trustees participate in any such telephonic
meeting, unless the 1940 Act requires that a particular action be taken
only at a meeting of the Trustees. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the Trustees
or by any two other Trustees. Notice of the time, date and place of all
meetings of the Trustees shall be given by the party calling the meeting to
each Trustee by telephone or telegram sent to his home or business address
at least twenty-four hours in advance of the meeting or by written notice
mailed to his home or business address at least seventy-two hours in
advance of the meeting. Notice need not be given to any Trustee who attends
the meeting without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to
any one of their number their authority to approve particular matters or
take particular actions on behalf of the Trust.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be Chairman of
the Board of Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and accounting officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the trust estate or the assets belonging
to the appropriate Series for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not Interested
Persons of the Trust, interest expense, taxes, fees and commissions of
every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares including expenses attributable
to a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and State
laws and regulations, charges of custodians, transfer agents, and
registrars, expenses of preparing and setting up in type Prospectuses and
Statements of Additional Information, expenses of printing and distributing
prospectuses sent to existing Shareholders, auditing and legal expenses,
reports to Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefore, insurance expense, association membership dues and
for such non-recurring items as may arise, including litigation to which
the Trust is a party, and for all losses and liabilities by them incurred
in administering the Trust, and for the payment of such expenses,
disbursements, losses and liabilities the Trustees shall have a lien on the
assets belonging to the appropriate Series prior to any rights or interests
of the Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees may in
their discretion from time to time enter into an investment advisory or
management contract(s) with respect to the Trust or any Series thereof
whereby the other party(ies) to such contract(s) shall undertake to furnish
the Trustees such management, investment advisory, statistical and research
facilities and services and such other facilities and services, if any, and
all upon such terms and conditions, as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration of Trust, the
Trustees may authorize the investment adviser(s) (subject to such general
or specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales or exchanges of portfolio securities and other
investment instruments of the Trust on behalf of the Trustees or may
authorize any officer, agent, or Trustee to effect such purchases, sales or
exchanges pursuant to recommendations of the investment adviser (and all
without further action by the Trustees). Any such purchases, sales and
exchanges shall be deemed to have been authorized by all of the Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
including those relating to Shareholder approval, authorize the investment
adviser to employ one or more sub-advisers from time to time to perform
such of the acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the investment adviser
and sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time enter
into a contract(s) providing for the sale of the Shares, whereby the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case,
the contract shall be on such terms and conditions as may be prescribed in
the Bylaws, if any, and such further terms and conditions as the Trustees
may in their discretion determine not inconsistent with the provision of
this Article VII, or of the Bylaws, if any; and such contract may also
provide for the repurchase or sale of Shares by such other party as
principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time to time enter
into a transfer agency and Shareholder service contract(s) whereby the
other party shall undertake to furnish the Trustees with transfer agency
and Shareholder services. The contract shall be on such terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or of the
Bylaws, if any. Such services may be provided by one or more entities.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1, 2 and 3
of this Article VII or in Article IX hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more
of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract, and no
such contract shall be invalidated or rendered voidable by reason of the
existence of any relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable
for any profit realized directly or indirectly therefrom, provided that the
contract when entered into was reasonable and fair and not inconsistent
with the provisions of this Article VII or the Bylaws, if any. The same
person (including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections 1, 2
and 3 above or Article IX, and any individual may be financially interested
or otherwise affiliated with persons who are parties to any or all of the
contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections 1 and 2 of this
Article VII shall be consistent with and subject to the requirements of
Section 15 of the 1940 Act (including any amendments thereof or other
applicable Act of Congress hereafter enacted) with respect to its
continuance in effect, its termination, and the method of authorization and
approval of such contract or renewal thereof, and no amendment to any
contract entered into pursuant to Section 1 shall be effective unless
assented to by a Majority Shareholder Vote.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote (i) for the election
of Trustees as provided in Article IV, Section 2, (ii) for the removal of
Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII,
Sections 1 and 5, (iv) with respect to the amendment of this Declaration of
Trust as provided in Article XII, Section 7, (v) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or not
a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, provided, however, that a Shareholder of a particular Series
shall not be entitled to bring any derivative or class action on behalf of
any other Series of the Trust, and (vi) with respect to such additional
matters relating to the Trust as may be required or authorized by law, by
this Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any State, as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all shares shall be voted
by individual Series, except (i) when required by the 1940 Act, Shares
shall be voted in the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects only the interests of
one or more Series, then only the Shareholders of such Series shall be
entitled to vote thereon. A shareholder of each series shall be entitled to
one vote for each dollar of net asset value (number of shares owned times
net asset value per share) of such series, on any matter on which such
shareholder is entitled to vote and each fractional dollar amount shall be
entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by
proxy. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this
Declaration of Trust or any Bylaws of the Trust to be taken by
Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other
place as the Trustees may designate. Special meetings of the Shareholders
of any Series may be called by the Trustees and shall be called by the
Trustees upon the written request of Shareholders owning at least one-tenth
of the outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the
1940 Act, as the same may be amended from time to time, seek the
opportunity of furnishing materials to the other Shareholders with a view
to obtaining signatures on such a request for a meeting, the Trustees shall
comply with the provisions of said Section 16(c) with respect to providing
such Shareholders access to the list of the Shareholders of record of the
Trust or the mailing of such materials to such Shareholders of record.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of
Trust permits or requires that holders of any Series shall vote as a
Series, then a majority of the aggregate number of Shares of that Series
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series. Any lesser number shall be
sufficient for adjournments. Any adjourned session or sessions may be held,
within a reasonable time after the date set for the original meeting,
without the necessity of further notice. Except when a larger vote is
required by any provision of this Declaration of Trust or the Bylaws, if
any, a majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where any
provision of law or of this Declaration of Trust permits or requires that
the holders of any Series shall vote as a Series, then a majority of the
Shares of that Series voted on the matter shall decide that matter insofar
as that Series is concerned.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank or trust company
having capital, surplus and undivided profits of at least two million
dollars ($2,000,000), or such other amount or such other entity as shall be
allowed by the Commission or by the 1940 Act, as custodian with authority
as its agent, but subject to such restrictions, limitations or other
requirements, if any, as may be contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust and
the custodian, if such procedures have been authorized in writing by the
Trust;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical and
accounting services; and
(2) to compute, if authorized to do so by the Trustees, the Net Asset Value
of any Series in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by
it as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and the sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank or trust
company organized under the laws of the United States or one of the states
thereof and having capital and surplus and individual profits of at least 2
million dollars ($2,000,000) or such other person as may be permitted by
the Commission, or otherwise in accordance with the 1940 Act as from time
to time amended.
CENTRAL CERTIFICATE SYSTEM
Section 2. Subject to such rules, regulations and orders as the Commission
may adopt, the Trustees may direct the custodian to deposit all or any part
of the securities owned by the Trust in a system for the central handling
of securities established by a national securities exchange or a national
securities association registered with the Commission under the Securities
Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act as from time to
time amended, pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits shall
be subject to withdrawal only upon the order of the Trust.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees shall have power, to the fullest extent permitted by the
laws of Massachusetts, at any time to declare and cause to be paid
dividends on Shares of a particular Series, from the assets belonging to
that Series, which dividends, at the election of the Trustees, may be paid
daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, and may be
payable in Shares of that Series at the election of each Shareholder of
that Series.
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute pro rata among the
Shareholders of a particular Series as of the record date of that Series
fixed as provided in Section 3 hereof a "stock dividend".
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular Series
desires to dispose of his Shares, he may deposit at the office of the
transfer agent or other authorized agent of that Series a written request
or such other form of request as the Trustees may from time to time
authorize, requesting that the Series purchase the Shares in accordance
with this Section 2; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter
of the Series shall purchase his said Shares, but only at the Net Asset
Value thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series and payment for such Shares shall
be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective.
DETERMINATION OF NET ASSET VALUE
AND VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series shall mean that amount
by which the assets of that Series, exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value per Share
shall be determined separately for each Series of Shares and shall be
determined on such days and at such times as the Trustees may determine.
Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the fair
value as determined in good faith by the Trustees, provided, however, that
the Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940 Act and
the rules, regulations and interpretations thereof promulgated or issued by
the Commission or insofar as permitted by any Order of the Commission
applicable to the Series. The Trustees may delegate any of their powers and
duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time the Trustees may cause the value per Share last
determined to be determined again in similar manner and may fix the time
when such redetermined value shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act.
Such suspension shall take effect at such time as the Trustees shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no
right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share existing after the
termination of the suspension.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. Provided they have exercised reasonable care and have acted
under the reasonable belief that their actions are in the best interest of
the Trust, the Trustees shall not be responsible for or liable in any event
for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained herein shall protect
any Trustee against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
INDEMNIFICATION
Section 2.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every person who is, or has been, a Trustee or officer of the Trust
(hereinafter referred to as "Covered Person") shall be indemnified by the
appropriate Series to the fullest extent permitted by law against liability
and against all expenses reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in which he becomes involved as
a party or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office or (B) not to
have acted in good faith in the reasonable belief that his action was in
the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither interested
persons of the Trust nor are parties to the matter based upon a review of
readily available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now
or hereafter be entitled, shall continue as to a person who has ceased to
be such Trustee or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust personnel, other
than Trustees and officers, and other persons may be entitled by contract
or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in paragraph (a) of this Section 2 may be paid by the applicable Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the applicable Series if it is ultimately determined
that he is not entitled to indemnification under this Section 2; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of
the Trustees who are neither interested persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section 2.
SHAREHOLDERS
Section 3. In case any Shareholder or former Shareholder of any Series of
the Trust shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the applicable
Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon.
ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust and not a
partnership is created hereby No Trustee hereunder shall have any power to
bind personally either the Trust's officers or any Shareholder. All persons
extending credit to, contracting with or having any claim against the Trust
or the Trustees shall look only to the assets of the appropriate Series for
payment under such credit, contract or claim; and neither the Shareholders
nor the Trustees, nor any of their agents, whether past, present or future,
shall be personally liable therefor. Nothing in this Declaration of Trust
shall protect a Trustee against any liability to which the Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to the
provisions of Section 1 of this Article XII and to Article XI, the Trustees
shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust, and subject to the
provisions of Section1 of this Article XII and to Article XI, shall be
under no liability for any act or omission in accordance with such advice
or for failing to follow such advice. The Trustees shall not be required to
give any bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the Trust
for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividends, or
the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of, and to vote at,
any such meeting, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to receive such
allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed or aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of time but subject to
the provisions of sub-section (b) of this Section 4.
(b) Subject to a Majority Shareholder Vote of each Series affected by the
matter or, if applicable, to a Majority Shareholder Vote of the Trust, the
Trustees may
(i) sell and convey the assets of the Trust or any affected Series to
another trust, partnership, association or corporation organized under the
laws of any state which is a diversified open-end management investment
company as defined in the 1940 Act, for adequate consideration which may
include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any affected Series,
and which may include shares of beneficial interest or stock of such trust,
partnership, association or corporation; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making provision for the payment of all such liabilities in either
(i) or (ii), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) ratably among the
holders of the Shares of the Trust or any affected Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and interest
of all parties shall be cancelled and discharged.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Secretary of the Commonwealth of Massachusetts and
the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer or Trustee of the Trust as to whether
or not any such supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same
effect as if it were the original, may rely on a copy certified by an
officer or Trustee of the Trust to be a copy of this instrument or of any
such supplemental declaration of trust. In this instrument or in any such
supplemental declaration of trust, references to this instrument and all
expressions like 'herein,' 'hereof' and 'hereunder,' shall be deemed to
refer to this instrument as amended or affected by any such supplemental
declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
APPLICABLE LAW
Section 6. The trust set forth in this instrument is made in the
Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily exercised by such a
trust.
AMENDMENTS
Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable
law or this Declaration of Trust in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a declaration of
trust supplemental hereto, which thereafter shall form a part hereof,
except that an amendment which shall affect the Shareholders of one or more
Series but not the Shareholders of all outstanding Series shall be
authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each Series affected and no vote of Shareholders of a
Series not affected shall be required. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require authorization by
Shareholder vote. Copies of the supplemental declaration of trust shall be
filed as specified in Section 5 of this Article XII.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified date as
set forth in the Bylaws if any, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
USE OF THE WORD "FIDELITY"
Section 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying word
"Fidelity" in the name of any Series of the Trust at some future date. Such
consent is conditioned upon the employment of FMR as investment adviser of
each Series of the Trust. As between the Trust and itself, FMR controls the
use of the name of the Trust insofar as such name contains the identifying
word "Fidelity". FMR may from time to time use the identifying word
"Fidelity" in other connections and for other purposes, including, without
limitation, in the names of other investment companies, corporations or
businesses which it may manage, advise, sponsor or own or in which it may
have a financial interest. FMR may require the Trust or any Series thereof
to cease using the identifying word "Fidelity" in the name of the Trust or
any Series thereof if the Trust or any Series thereof ceases to employ FMR
or a subsidiary or affiliate thereof as investment adviser.
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 14th day of April, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Gerald C. McDonough
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Marvin L. Mann
Richard J. Flynn Marvin L. Mann
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
Exhibit 5(b)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY MAGELLAN FUND
AGREEMENT made this 1st day of April 1994 by Fidelity Management &
Research Company, a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (Far East) Inc. (hereinafter
called the "Sub-Advisor"); and Fidelity Magellan Fund, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust or the Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management Contract
on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated persons
have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries,
including securities issued in and issuers located in such countries, and
providing investment advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor, the
Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the Portfolio
and the Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such information
may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the Advisor,
the Sub-Advisor shall, subject to the supervision of the Advisor, manage
all or a portion of the investments of the Portfolio in accordance with the
investment objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of 1940 (the "1940 Act") and rules thereunder,
as amended from time to time, and such other limitations as the Trust or
Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only
to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction of
the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor, at its
own expense, shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers selected by
the Sub-Advisor, which may include brokers or dealers affiliated with the
Advisor or Sub-Advisor. The Sub-Advisor shall use its best efforts to seek
to execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio and to any
other accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust shall
periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, the Advisor agrees to pay the Sub-Advisor
a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be equal to 105% of
the Sub-Advisor's costs incurred in connection with rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement. The
Sub-Advisory Fee shall not be reduced to reflect expense reimbursements or
fee waivers by the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor
or the Sub-Advisor as directors, officers or otherwise and that directors,
officers and stockholders of the Advisor or the Sub-Advisor are or may be
or become similarly interested in the Trust, and that the Advisor or the
Sub-Advisor may be or become interested in the Trust as a shareholder or
otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in other
activities, provided, however, that such other services and activities do
not, during the term of this Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations hereunder.
The Sub-Advisor shall for all purposes be an independent contractor and not
an agent or employee of the Advisor or the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, the Trust or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph 9, this Agreement shall continue in force until July 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph 9, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or with respect to the Portfolio by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and
agrees that any obligations of the Trust or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Advisor shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Advisor seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
BY:
Charles F. Dornbush, Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY:
J. Gary Burkhead, President
FIDELITY MAGELLAN FUND
BY:
J. Gary Burkhead, Senior Vice President
Exhibit 5(c)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY MAGELLAN FUND
AGREEMENT made this 1st day of April 1994 by Fidelity Management &
Research Company, a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (U.K.) Inc. (hereinafter
called the "Sub-Advisor"); and Fidelity Magellan Fund, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust or the Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management Contract
on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated persons
have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries,
including securities issued in and issuers located in such countries, and
providing investment advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor, the
Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the Portfolio
and the Advisor such factual information, research reports and investment
recommendations all as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the Advisor,
the Sub-Advisor shall, subject to the supervision of the Advisor, manage
all or a portion of the investments of the Portfolio in accordance with the
investment objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of 1940 (the "1940 Act") and rules thereunder,
as amended from time to time, and such other limitations as the Trust or
Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only
to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction of
the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor, at its
own expense, shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers selected by
the Sub-Advisor, which may include brokers or dealers affiliated with the
Advisor or Sub-Advisor. The Sub-Advisor shall use its best efforts to seek
to execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio and to any
other accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust shall
periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, the Advisor agrees to pay the Sub-Advisor
a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be equal to 110% of
the Sub-Advisor's costs incurred in connection with rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement. The
Sub-Advisory Fee shall not be reduced to reflect expense reimbursements or
fee waivers by the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers or
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor
or the Sub-Advisor as directors, officers or otherwise and that directors,
officers and stockholders of the Advisor or the Sub-Advisor are or may be
or become similarly interested in the Trust, and that the Advisor or the
Sub-Advisor may be or become interested in the Trust as a shareholder or
otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in other
activities, provided, however, that such other services and activities do
not, during the term of this Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations hereunder.
The Sub-Advisor shall for all purposes be an independent contractor and not
an agent or employee of the Advisor or the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, the Trust or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph 9, this Agreement shall continue in force until July 31, 1994 and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph 9, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or with respect to the Portfolio by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and
agrees that any obligations of the Trust or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Advisor shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Advisor seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
BY:
Charles F. Dornbush, Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY:
J. Gary Burkhead, President
FIDELITY MAGELLAN FUND
BY:
J. Gary Burkhead, Senior Vice President
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 40
to the Registration Statement on Form N-1A of Fidelity Magellan Fund, of
our report dated April 29, 1994 on the financial statements and financial
highlights included in the March 31, 1994 Annual Report to Shareholders of
Fidelity Magellan Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Boston, Massachusetts
May 18, 1994
Exhibit 16(c)
MAGELLAN (MAG)
Factor Adj. NAV
------------------------
02-Jul-93 1.062428 65.29
05-Jul-93 1.062428 64.81
06-Jul-93 1.062428 64.81
07-Jul-93 1.062428 64.79
08-Jul-93 1.062428 65.21
09-Jul-93 1.062428 65.44
12-Jul-93 1.062428 65.66
13-Jul-93 1.062428 65.90
14-Jul-93 1.062428 66.25
15-Jul-93 1.062428 65.95
16-Jul-93 1.062428 65.37
19-Jul-93 1.062428 65.14
20-Jul-93 1.062428 65.60
21-Jul-93 1.062428 65.75
22-Jul-93 1.062428 65.41
23-Jul-93 1.062428 65.76
26-Jul-93 1.062428 66.35
27-Jul-93 1.062428 66.12
28-Jul-93 1.062428 66.10
29-Jul-93 1.062428 66.40
30-Jul-93 1.062428 66.42
02-Aug-93 1.062428 66.91
03-Aug-93 1.062428 66.95
04-Aug-93 1.062428 67.18
05-Aug-93 1.062428 67.10
06-Aug-93 1.062428 67.45
09-Aug-93 1.062428 67.94
10-Aug-93 1.062428 67.93
11-Aug-93 1.062428 68.07
12-Aug-93 1.062428 68.02
13-Aug-93 1.062428 68.08
16-Aug-93 1.062428 68.51
17-Aug-93 1.062428 68.94
18-Aug-93 1.062428 69.22
19-Aug-93 1.062428 69.28
20-Aug-93 1.062428 69.22
23-Aug-93 1.062428 69.45
24-Aug-93 1.062428 69.99
25-Aug-93 1.062428 70.08
26-Aug-93 1.062428 69.79
27-Aug-93 1.062428 69.81
30-Aug-93 1.062428 70.05
31-Aug-93 1.062428 70.33
01-Sep-93 1.062428 70.25
02-Sep-93 1.062428 70.07
03-Sep-93 1.062428 70.01
06-Sep-93 1.062428 69.09
07-Sep-93 1.062428 69.09
08-Sep-93 1.062428 68.29
09-Sep-93 1.062428 68.96
10-Sep-93 1.062428 69.53
13-Sep-93 1.062428 69.31
14-Sep-93 1.062428 68.63
15-Sep-93 1.062428 69.10
16-Sep-93 1.062428 69.07
17-Sep-93 1.062428 69.04
20-Sep-93 1.062428 68.95
21-Sep-93 1.062428 68.42
22-Sep-93 1.062428 69.54
23-Sep-93 1.062428 70.12
24-Sep-93 1.062428 70.37
27-Sep-93 1.062428 71.04
28-Sep-93 1.062428 71.32
29-Sep-93 1.062428 71.34
30-Sep-93 1.062428 71.09
01-Oct-93 1.062428 71.61
04-Oct-93 1.062428 71.78
05-Oct-93 1.062428 71.35
06-Oct-93 1.062428 71.16
07-Oct-93 1.062428 70.63
08-Oct-93 1.062428 70.76
11-Oct-93 1.062428 70.87
12-Oct-93 1.062428 71.42
13-Oct-93 1.062428 71.41
14-Oct-93 1.062428 71.60
15-Oct-93 1.062428 71.88
18-Oct-93 1.062428 71.62
19-Oct-93 1.062428 70.56
20-Oct-93 1.062428 70.32
21-Oct-93 1.062428 70.55
22-Oct-93 1.062428 70.64
25-Oct-93 1.062428 70.46
26-Oct-93 1.062428 70.44
27-Oct-93 1.062428 70.78
28-Oct-93 1.062428 71.04
29-Oct-93 1.062428 71.14
01-Nov-93 1.062428 71.52
02-Nov-93 1.062428 71.55
03-Nov-93 1.062428 70.62
04-Nov-93 1.062428 69.61
05-Nov-93 1.062428 69.78
08-Nov-93 1.062428 70.21
09-Nov-93 1.062428 70.21
10-Nov-93 1.062428 70.78
11-Nov-93 1.062428 70.84
12-Nov-93 1.062428 71.11
15-Nov-93 1.062428 70.51
16-Nov-93 1.062428 70.42
17-Nov-93 1.062428 70.18
18-Nov-93 1.062428 69.75
19-Nov-93 1.062428 69.36
22-Nov-93 1.062428 68.54
23-Nov-93 1.062428 68.93
24-Nov-93 1.062428 69.42
25-Nov-93 1.062428 69.42
26-Nov-93 1.062428 69.28
29-Nov-93 1.062428 68.71
30-Nov-93 1.062428 68.80
01-Dec-93 1.062428 69.25
02-Dec-93 1.062428 69.40
03-Dec-93 1.062428 69.59
06-Dec-93 1.062428 69.37
07-Dec-93 1.062428 69.45
08-Dec-93 1.062428 69.49
09-Dec-93 1.062428 69.22
10-Dec-93 1.000000 69.36
13-Dec-93 1.000000 69.64
14-Dec-93 1.000000 69.27
15-Dec-93 1.000000 69.13
16-Dec-93 1.000000 69.20
17-Dec-93 1.000000 69.61
20-Dec-93 1.000000 69.60
21-Dec-93 1.000000 69.47
22-Dec-93 1.000000 69.73
23-Dec-93 1.000000 70.07
24-Dec-93 1.000000 70.07
27-Dec-93 1.000000 70.41
28-Dec-93 1.000000 70.64
29-Dec-93 1.000000 70.87
30-Dec-93 1.000000 70.81
31-Dec-93 1.000000 70.85
03-Jan-94 1.000000 70.48
04-Jan-94 1.000000 70.80
05-Jan-94 1.000000 71.39
06-Jan-94 1.000000 71.62
07-Jan-94 1.000000 71.85
10-Jan-94 1.000000 72.32
11-Jan-94 1.000000 72.16
12-Jan-94 1.000000 72.32
13-Jan-94 1.000000 72.29
14-Jan-94 1.000000 72.65
17-Jan-94 1.000000 72.76
18-Jan-94 1.000000 72.92
19-Jan-94 1.000000 72.80
20-Jan-94 1.000000 72.93
21-Jan-94 1.000000 72.95
24-Jan-94 1.000000 72.76
25-Jan-94 1.000000 72.38
26-Jan-94 1.000000 72.33
27-Jan-94 1.000000 72.80
28-Jan-94 1.000000 73.10
31-Jan-94 1.000000 73.65
01-Feb-94 1.000000 73.76
02-Feb-94 1.000000 74.20
03-Feb-94 1.000000 74.07
04-Feb-94 1.000000 72.50
07-Feb-94 1.000000 72.63
08-Feb-94 1.000000 73.09
09-Feb-94 1.000000 73.35
10-Feb-94 1.000000 72.93
11-Feb-94 1.000000 72.74
14-Feb-94 1.000000 72.75
15-Feb-94 1.000000 73.13
16-Feb-94 1.000000 73.31
17-Feb-94 1.000000 73.13
18-Feb-94 1.000000 73.02
21-Feb-94 1.000000 73.51
22-Feb-94 1.000000 73.51
23-Feb-94 1.000000 73.43
24-Feb-94 1.000000 72.59
25-Feb-94 1.000000 72.74
28-Feb-94 1.000000 73.11
01-Mar-94 1.000000 72.75
02-Mar-94 1.000000 72.77
03-Mar-94 1.000000 73.00
04-Mar-94 1.000000 73.52
07-Mar-94 1.000000 73.94
08-Mar-94 1.000000 73.75
09-Mar-94 1.000000 73.82
10-Mar-94 1.000000 73.53
11-Mar-94 1.000000 73.76
14-Mar-94 1.000000 74.15
15-Mar-94 1.000000 74.25
16-Mar-94 1.000000 74.73
17-Mar-94 1.000000 75.16
18-Mar-94 1.000000 75.08
21-Mar-94 1.000000 74.70
22-Mar-94 1.000000 74.80
23-Mar-94 1.000000 74.79
24-Mar-94 1.000000 73.70
25-Mar-94 1.000000 72.90
COMMENTS RECEIVED ON APRIL 8, 1994
FROM MICHAEL J. SHAFFER
FIDELITY MAGELLAN FUND (FILE NO.2-21461)
POST-EFFECTIVE AMENDMENT NO. 39
PROSPECTUS
1. C: Please fax a copy of Magellan's fee table, performance table, and
financial highlights.
R: The appropriate sections were faxed to your attention on April 29th.
Brokerage participations and how they effect fees.
2. C: How will the prospectus meet all of the requirements of Item IIC of
the 1993 Generic Comment Letter?
R: The following text will be added to the prospectus if directed
brokerage commissions impact the numbers in the fee table: "A portion of
the brokerage commissions that the fund paid was used to reduce fund
expenses. Without this reduction, the total fund operating expenses would
have been __%."
Small Company Stocks
"Although common stocks have a history of long-term growth in value, their
prices tend to fluctuate in the shorter term, particularly those of smaller
companies."
3. C: If the fund invests more than 5% in small company stocks, please add
specific risk disclosure to the equity securities tile.
R: Given our past and anticipated level of investment in small company
stocks and their associated risks, we believe we have adequately described
the risks as they apply to small company stocks. We decline to modify our
disclosure.
Fee Rates
4. C: If the fund's management fee is at or above .75%, please add
disclosure stating that the management fee is higher than that of other
mutual funds. In addition please provide the staff a copy of the fee
tables and performance illustrations.
R: The fund's total management fee for fiscal 1994 was .76%. The
Prospectus includes the following disclosure:
"The total management fee rate for fiscal 1994 was .76%. This rate was
higher than that of most other mutual funds as a result of a positive
performance adjustment."
Debt Holdings Table
Debt Table - Unrated Securities
"The dollar-weighted average of debt securities not rated by Moody's or
S&P amounted to __%. This may include securities rated by other
nationally-recognized rating services, as well as unrated securities.
Unrated securities are not necessarily lower-quality securities."
5. C: The prospectus groups securities that are not rated by Standard &
Poor's or Moody's into a category with unrated securities. Please provide
a complete listing of the fund's securities that are rated by any
nationally-recognized rating service.
R: The October 3, 1989 junk bond letter states that the asset composition
table should disclose the percentages of total investments represented by a
nationally recognized statistical organization. We believe our practice of
considering securities not rated by Moody's or S&P, along with
securities not rated by any nationally recognized rating service together
in one basket is consistent with both the requirements and the purpose of
the junk bond letters.
Based on our review of debt table disclosure used by competitors in the
industry and conversations with them, we believe our disclosure is
consistent with, and in some cases exceeds, industry practice. In fact,
some investment companies provide asset composition rating information for
only one rating agency. All other securities are considered unrated, even
if they are rated by other rating agencies.
We believe including rating information for securities rated by agencies
such as Fitch or Duff & Phelps would not provide any meaningful
assistance to investors because in many cases, securities rated only by
these agencies constitute a small portion of a given portfolio and ratings
by two agencies are representative of the fund's holdings. Given that the
purpose of the debt table is to provide information about the quality of
the fund's debt holdings, we believe adding two additional columns is
unnecessary to the understanding of investors and may in fact be confusing.
We continue to believe our disclosure adequately informs investors of the
credit quality of the fund and is consistent with the purpose of the
disclosure required under the SEC's Junk Bond letters.
Pursuant to a conversation between David Wills and Judy Hogan, we
understand that the SEC staff intends to pursue this issue further on an
industry-wide basis. Until resolution of these issues, we decline to modify
our disclosure.
